Financial Ratios For Dollar Tree
Financial Ratios This week I obtained the financial ratios for Dollar Tree based on the financial statements of the company. I was able to complete my financial analysis project with the statements on the company. Below you will find the eight financial ratios that I obtained on Dollar Tree. Cash Ratio 866.4/2105.9=0.41 The cash ratio is the cash equivalent divided by the current liabilities. Without having a good cash ration then the company would not have ample amount of cash to run a business sufficiently. You must have cash because it is the lifeline center of a business. You have got to be able to pay your bills, employees, and other unknown debt. The cash ratio for Dollar Tree is 0.41. It is less than .50 cent of every dollar. It …show more content…
Dollar Tree current ratio increased from 2016 to 2017. It increased by 2%. So, with a ratio greater than 1.0 is very well acceptable. The company is showing that it will be able to cover its liabilities. They want to have a lot of inventory because everything in the store is a $1.00. I feel that it is good to have a ratio 2 or lower because it will show that they are using their current asset. All creditors like to see a higher current ratio than a lower one. It doesn’t look bad when you have a good ratio because it is meeting all …show more content…
The balance for Dollar Tree debt to asset was 0.80. It is really about the same debt to asset ratio as last year. The balance on the debt to asset was 0.85 last year. Inventory Turnover Ratio 14324.5/2875.65=4.98 The inventory turnover ratio is the cost of goods sold divided by the average inventories. The balance on the Inventory Turnover Ratio is 4.98. The company Inventory Turnover Ratio was slightly high. When dealing with turnovers they most likely go through different cycles. Some of the cycles that Dollar Tree use is to obtain inventory, selling of the inventory, and getting money from customers. Return on Equity Ratio 896.2/2.4=373.42x100=37,341.67 When obtaining the Return on Equity for Dollar Tree, you take the net income and divide it by the shareholder’s equity. When you obtain that amount then you multiply that by 100. Then you get your Return on Equity Amount. The net income by shares are up 2% from last year. The Dollar Tree repurchases stock on the open market under different agreements. Net Profit Margin
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