Question
Calculate ratios (see table below) for Dollar General Corp (link below is dollar general form 10K). And address at least two of the questions below.
Calculate ratios (see table below) for Dollar General Corp (link below is dollar general form 10K). And address at least two of the questions below. Discuss the company and how its debt and leasing fit with their strategy and overall financial statements. As part of your conclusion, provide your opinion on the liquidity and solvency trends for the last two years of the company.
https://investor.dollargeneral.com/websites/dollargeneral/English/310010/us-sec-filing.html?format=convpdf&secFilingId=003b8c70-dfa4-4f21-bfe7-40e6d8b26f63&shortDesc=Annual%20Report
Questions to consider.
- How does the use of debt and leasing fit in with the companys strategy?
- What is your assessment of liquidity and solvency?
- Will the company need to refinance debts soon and at higher interest rates?
- Has the company used debt to buy back stock?
- Has the company used debt to acquire other companies?
- Has the company used debt to invest in property?
- Is debt being used to finance current operating activities?
- Do the upcoming debt payments seem do-able?
- Are there any unusual covenants or interesting arrangements?
Compute the following Ratios.
Vertical | Size of debt and lease liabilities in relation to total assets for the current and prior years |
Horizontal | Change in debt and lease liabilities for the last one year |
Current lease liability and current debt liability/total lease and long-term debt | Current and prior year |
Cash flow in from debt and lease financing to cash flow out | Current and prior year |
Current Ratio | Current and prior year |
Debt and Leases due in the next five years/Total Debt and leases | Current year |
Debt to Equity Ratio | Current and prior year |
Cash flow from operations/Income from Operations | Current and prior Year |
Additional ratios, as needed, to tell the story |
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