Vicki R. Justice
May 25, 2012
Dollar Tree Annual Report 2011
The company that I chose to report on is a Fortune 500 company called Dollar Tree. They are known for their $1 price-point variety stores. They are headquartered in Chesapeake, Virginia and operate over 4,300 stores over the 48 contiguous United States and five Canadian Provinces (Dollar Tree annual report, 2011). The main sections of the annual report to me would be:
* Net sales which are the gross sales minus returns, discounts, and allowances were $6.6 billion in 2011 that compared to $5.9 billion for 2010 which showed an overall increase in sales. * Gross profit which is sales minus all costs directly associated with those sales. For 2011, Dollar tree reported their gross profit as $2.4 billion compared to 2010 with a gross profit of $2.1 billion. * Net income is also known as profit. Dollar Tree for 2011 had a bottom line profit after all expenses were deducted of $488.3 million. * Earnings per Share are what drive the value of stock. The market pays more attention to EPS than it does to anything else. The annual report showed EPS to be $4.03 for 2011 compared to $ 3.10 in 2010. * Return on shareholder’s equity (ROE) equals the company’s net income divided by shareholder’s equity and shows how well a company utilizes shareholder’s money. ROE was 34.8% for 2011 compared to 27.5% for 2010.
The key factors that affected the company’s performance for 2011 were expansion of stores, opening of new stores and relocating stores to more profitable locations. Dollar Tree bases its success on their focus on the customer. They aim for high value merchandise at a cheap price. They also give credit to their dedicated associates and the superior job they do.
The primary assets held by Dollar Tree are merchandise inventory followed by the next largest asset of property, plant and equipment. Cash and cash...