Requirement 3

Evaluate the companys ability to sell inventory and pay debts during 2018 and 2017. In your analysis, you should compute the following ratios, and then comment on what those ratios indicate. Since the 2018 annual report only includes the balance sheets for 2018 and 2017, you will need to look up the annual report for 2017 for information about 2016 accounts receivable, inventory, and accounts payable.

1. Accounts receivable turnover and days sales outstanding
2. Inventory turnover and days inventory outstanding
3. Accounts payable turnover and days payable outstanding
4. Cash conversion cycle
5. Current ratio
6. Quick (acid-test) ratio
7. Debt ratio

Requirement 4

Evaluate Dollaramas cash flow.

1. For 2018, is Dollaramas net cash flow from operations greater than or less than net income? What is the primary cause of the difference?
2. For 2017 and 2018, what is the primary source of cash from investing activities? What is the primary use of cash from investing activities for 2017 and 2018?
3. For 2017 and 2018, what is the primary source of cash from financing activities? What is the primary use of cash from financing activities for 2017 and 2018?
4. What trend(s) do you detect from this analysis?

Requirement 5

Evaluate Dollaramas shares as an investment.

1. What was the closing market price of Dollaramas shares on January 29, 2018, the next trading day after the balance-sheet date of January 28, 2018?
2. Compute the price-earnings ratio using your EPS calculation and the market price you just determined. Google Dollaramas stock price on Yahoo Finance; Dollaramas ticker symbol is DOL.TO.
3. Based on Managements Discussion and Analysis (annual report) as well as any business news (Google Finance is an example), would you evaluate the companys shares as a buy, hold, or sell? State your reasons.