FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Dollarama Inc. is a Canada-based company, which offers various assortment of general merchandise, consumable products and seasonal items. The Company operates through its subsidiaries, including Dollarama L.P and Dollarama International Inc. (Dollarama International). Dollarama L.P. operates the chain of stores in Canada and performs related logistical and administrative support activities. Dollarama International has retail operations in Latin America through Dollarcity, a value retailer that offers an assortment of general merchandise, consumable products and seasonal items in stores located in El Salvador and Guatemala and stores located in Colombia and Peru. Dollarama International also sells merchandise and renders services to Dollarcity. It offers products under various departments, such as Christmas, school and office, home, kitchen, food, health and beauty, cleaning, hardware, party, toys, electronics and pets. Find below Dollarama financial statement for the period 2018-2021.

 

Income Statement

Annual income statement item

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2018
1/27/18

2019
2/2/19

2020
2/1/20

2021
1/30/21

Total Revenue

3,266

3,549

3,787

4,026

Cost of Revenue, Total

1,965

1,965

2,135

2,258

Sell/General/Admin. Expenses, Total

475

505

552

549

Depreciation

58

220

227

251

Amortization of Intangibles

13

14

16

19

Depreciation/Amortization

71

233

243

270

Inter/Invest Inc, Operating

--

0

-10

-20

Unusual Expense (Income)

--

0

-3

108

Total Operating Expense

2,511

2,703

2,916

3,165

Operating Income

756

845

871

861

Inter Expse,Net Non-Operat

-40

-95

-101

-96

Net Income Before Taxes

716

751

770

765

Provision for Income Taxes

196

206

206

201

Net Income After Taxes

519

545

564

564

Net Income Before Extra. Items

519

545

564

564

Net Income

519

545

564

564

 

Balance Sheet

Annual balance sheet item

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2018
1/27/18

2019
2/2/19

2020
2/1/20

2021
1/30/21

Cash and Short Term Inv

55

50

90

439

Total Receivables, Net

12

36

35

21

Total Inventory

491

581

623

631

Prepaid Expenses

7

16

12

10

Other Curr. Assets, Total

0

6

4

0

Total Current Assets

565

689

764

1,100

Buildings

--

424

495

541

Land/Improvements

--

65

70

70

Machinery/Equipment

--

492

562

638

Construction in Progress

--

30

0

0

Other Prop./Plant/Equip.

1,142

1,208

1,284

1,345

Prop./Plant/Equip. - Gross

1,142

2,218

2,411

2,594

Accumulated Depreciation

--

-424

-484

-540

Prop./Plant/Equip. - Net

1,633

1,794

1,928

2,054

Goodwill, Gross

--

728

728

728

Accum. Goodwill Amort.

--

0

0

0

Goodwill, Net

728

728

728

728

Intangibles, Gross

--

211

231

258

Accum. Intangible Amort.

--

-62

-78

-97

Intangible, Net

143

149

153

162

Long Term Investments

--

--

143

179

Other Long Term Assets

--

--

--

0

Total Assets

3,069

3,360

3,716

4,224

Accounts Payable

--

80

65

67

Payable/Accrued

227

--

--

--

Accrued Expenses

--

79

91

96

Notes Payable/ST Debt

0

0

0

0

Curr. Port. LT Dbt/Cap Ls.

546

164

789

1,015

Dividends Payable

12

13

14

15

Income Taxes Payable

36

35

0

13

Other Payables

--

72

133

90

Other Current Liabilities

39

1

0

26

Other Curr. Lblts, Total

87

120

147

143

Total Current Liabilities

861

443

1,092

1,321

Long Term Debt

1,260

1,891

1,270

1,044

Capital Lease Obligations

1,196

1,246

1,332

1,402

Total Long Term Debt

2,457

3,137

2,602

2,446

Total Debt

3,003

3,301

3,392

3,461

Deferred Income Tax

83

97

114

122

Total Liabilities

3,401

3,677

3,809

3,889

Common Stock

416

408

449

485

Additional Paid-In Capital

28

32

29

29

Ret. Earn.(Accum. Deficit)

-743

-765

-574

-150

Other Equity, Total

-32

7

4

-29

Total Equity

-332

-317

-92

335

Total Liabilities & Shareholders' Equity

3,069

3,360

3,716

4,224

 

Required

1. Calculate the following ratios for the period 2018-2021 and comment on how Covid-19 has affected this Firm. In your analysis explain strategies that Dollarama can use to recover fully.

A) Current Ratio

B) Total Debt ratio

C) Inventory Turnover and Days sales in Inventory

D) Receivable Turnover and Days sales in Receivable Turnover

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