In November 2013, Dollarama Inc. completed its initial bond offering of C$400 million of

senior unsecured debentures due November 5th, 2018. Use the company's financial

statements that can be found on

www.SEDAR.com

and the

DBRS published methodology

"

Rating Companies in the Merchandising Industry

" that has been posted on Quercus, to

answer the following questions:

a)

(3 marks) Based on the DBRS methodology as a guide, comment on this

company's business risk. Your commentary should focus on the sustainability

(therefore predictability) of the company's cash flows. (

Your answer should not

exceed 6-8 lines!

).

b)

(12 marks) From SEDAR, use the company's financial statements to construct

the applicable financial statements on a Last Twelve Months (LTM) basis to

August 4th, 2013

and calculate the following ratios:

% of Total debt in the capital structure (Total Debt/Total Debt + Equity)

EBIT-to-Interest expense

EBITDA - to - interest expense

Total Debt to EBITDA

Return on Equity

Please consider the Company's use of operating leases (see note 12). If you

consider these leases as a form of debt, please include them in your calculations

above.

c)

(3 marks) Using your answers from a) and b) and referring to page 11 (financial

ratios) of the DBRS report, what is your opinion of the likely credit rating for

Dollarama? Please do not exceed 3-5 lines in your answer.

d)

(2 marks) Assume Dollarama had a maintenance test in their current credit

agreement with the banks that stated: EBIT to Interest expense of at least 4

times, calculated on a rolling four quarter basis, would the company meet the

test?