The concept of serving other has work well for Dollar General in particular. According to market watch Doller General has been increasing there sales each years respectively for example from 2012 to 2016 they have increased from $14.18 Billion to $20.37 Billion in 2016. Doller General has increased their sale by $5.56 Billion in 5 years. Doller General was able to make a net profit of $766.69M, $952.66 M, $1.03B, $1.07B and $1.17B from 2012 to 2016 respectively, recently "Dollar General Corp achieved in the second quarter (2016), above Company average Operating Income improvement of 7% year on year, to $ 509.10 millions. Looking into second quarter results within Department & Discount Retail industry 5 other companies have achieved higher …show more content…
. The higher the interest coverage ratio, the stronger the company financial strength, in 2016 second quarter Doller general was at 20.91 which mean Doller general strong financial future. Whereas debt to revenue ration work opposite, the lower its better. In 2016 second quarter Doller general was at 0.57, it's just the little more than 50% but I believe the serving other concept will still work. The Altman Z-score, when Z-score is greater than 2.99, it is in safe Zone "(gurufocus.com)". In 2016 second quarter Doller general has a Z=score of 4.91, which clearly indicate that the cooperation is safe …show more content…
It has an average financial stability in the present market economies. I believe that investment in Doller General can varies accordingly. The company target market with its new product mix line might make a major boost on financial ability in future but at the movement I will not be interested in making an investment on Doller General. The stock market has been going down stare for a while. Their inventory and receivable are not in good
Debt ratio percentages increased for Company G from 28.34% to 29.94%. Industry quartile is 30, 45 and 66 percent, putting Company G below average. Debt Ratio represents strength for Company G.
This organizational analysis is an assessment of Family Dollar Inc., in regards to its overall strategic Human Resource functions. The analysis and recommendations are based on survey results, which were gathered from key employees in the organization. Based on our survey findings, we were able to assess Family Dollar’s performance in these areas: training and development, pay for performance, performance management,
Based on the above income statement data (assume interest income is zero), the company's interest coverage ratio is
The internal analysis of the company paints a picture of a firm that is well endowed with resources, both human and capital. The company boasts of an asset base of $11.4 billion according to the financial reports for the year 2012. This is huge, and it shows that the company is well grounded and has the capacity to gain a competitive edge in the highly competitive retail market in which it operates (Britton & Jorissen, 2007).
Cash flow from operations to total liabilities ratio for 2010 is 15.1% and for 2009 is 11.7%. Financially healthy company has cash flow from operations to total liabilities ratio of 20% or more. Dollar General has a high long-term liquidity risk. Interest coverage Ratio for 2010 is 3.6 and for 2009 is 1.6. A high fluctuation makes the company risky, although it exceeded a 3.0 benchmark in 2010 it should show this stability over time.
With different level of the debt of the company according to Exhibit 3, we would predict by comparing to its peer Warner. Lambert Company at 32.4% debt to total capital ratio still maintain at weak AAA level. AHP had much better financial performance e.g. Earnings per Share and Return on Equity. With 50% Debt to Total Equity ratio, AHP may receive lower rating at AA level and we do not expect them to go lower than BBB rating even with 70% Debt to Total Equity
As one of the largest American retailers, The Target Corporation offers home goods, clothing, electronics, food, and other household necessities at competitive discount rates. Founded in 1902 originally as a department store in the midwest, it has since branched off and grown to offer more to the common people. The company in its long run of upscale discount retailing has proved to be a worthy investment, but has since fallen in it stature. The mass amounts of goods and services generates a high-net of profit, but its recent spike in prices on some of their products. a security breach, and the state of the economy have attributed to a loss in clientele. Therefore. the Target Corporation is not worth investing it, based on the current shape of the economy and its continuous errors towards its once loyal customers.
Macy's Inc. is one of the nation's largest and well known department store chains. Started over 150 years ago, Macy's has continually generated excellent returns for its shareholders and employees. Currently, in the midst of a global recession, Macy's has generated huge profits with same store sales increasing 5.3% year to date. In 2012 same store sales increased 4.6% in the month of February alone (Macy's Inc., 2012). In fact, throughout the duration of 2012, Macy's is projecting even larger profits for its underlying business operations. Even though Macy's has experienced success with both its assortments and brand, its competitors haven't faired so well. Sears, due in part to part to a lackluster holiday season, has been forced to close nearly 120 locations to generate excess liquidity in an effort to shore up its balance sheet (Isidore, 2011).Other competitors who cater specifically to the middle class consumer have also lost significant amounts of market share as consumers trade down due to the economy. This performance is primarily due to the core functions and operations of the business. Planning, organizing, leading, and controlling. Macy's excels at these forms of management, which has allowed the company to perform at a higher level relative to its peers in the industry.
Overall the long term solvency position of the company satisfactory and less risky, because managerial policies kept the repercussion of recession ( increase in interest rate) in mind and hence reduced its reliance on debt financing This gives it a secure position from the point of view of long term creditors.
As the leading discount retailer in the United States, WalMart (NYSE:WMT) has consistently shown an exceptional ability to master the complexities of logistics, supply chain management, retailing and pricing management. The WalMart supply chain is among the most advanced and sophisticated in its use of analytics and information systems globally, often computing pricing variation and analysis literally overnight based on satellite uploads of information (WalMart Investor Relations, 2013). WalMart has also successfully taken a capital-intensive business model and transformed it into a retailing business capable of generating high profitability from low margin products based one efficiency alone (Zhu, Singh, Manuszak, 2009). WalMart is also one of the most-researched companies in the world, and continues to provide in-depth financial data on their Investor Relations site (WalMart Investor Relations, 2013). The purpose of this analysis is to evaluate the mission, vision, and overall strategy of WalMart and also define three objectives for improving the organization's financial position, showing how the objectives defined relate to the mission, vision and strategy of the company. In addition for each objective, meaningful performance measures are provided in addition to defined expected level of performance as well. For each of the objectives chosen at least one new
The outlook for growth is risky considering this company is very volatile, but if corrections are made to better the industry (i.e. expand
Over the last several years Dollar General has seen great success with the strategies currently in place. With potential changes in the economy and some situations presently in the company Dollar General must plan for the future. This memo was put together to identify our strengths and weakness, analysis the external factors of the company, and find options for the future. The options of where to invest our time and effort are; Geographic expansion within the U.S, Improve Merchandising Productivity, and Expand into Services. The recommendation chosen for the Dollar General was to pull back slightly on the current plan of expanding through building
The long-term liquidity risk ratio such as LT debt/Equity, D/E, and Total Liabilities to Total Assets all show a decline from year 2005 due to the repayment of debts. The interest coverage ratio also shows a healthy number of 29.45 in comparison to the industrial average of 15.04 indicating a high ability to pay out its interest expense. Such a low relative risk is not surprising due to the nature of its business depending heavily in R&D development and large intangible assets.
In terms of financial flexibility, a relatively high interest coverage ratio (ICR) of 36.8 supports the company’s ability to Flexibility take on more debt. Especially by comparing the ratio with its peers, such ratio seems to match with its risk aversion philosophy. Agency Cost of Debt
1. Evaluate Family Dollar’s retail strategy. Will it work in both good and bad economic times?