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 Open help content 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 Open help content 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

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 Open help content 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 Open help content 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Income Statement

Annual income statement item Open help content	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 Open help content	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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