Transcript Family Dollar - Tony Gauvin`s Web Site

FAMILY DOLLAR, 2009
Strategic Management Case Study
Tony Gauvin, UMFK
4/13/2015
Copyright 2012, Tony Gauvin, UMFK
1
Overview
Strategy Formulation
Company Overview
A Brief history of Family Dollar
Existing Mission and Vision
Existing Objectives and Strategies
Current Issues
New Mission and Vision
External Assessment
Industry analysis
Opportunities and threats
EFE Matrix
CPM Matrix
Internal Assessment
Strengths and weaknesses
Organizational Chart
Financial Condition
IFE Matrix
SWOT Matrix
Space Matrix
IE Matrix
Grand Strategy Matrix
Matrix Analysis
QSPM Matrix
Strategic Plan for the Future
Objectives
Strategies
Implementation Issues
EPS/EBIT
Projected Financials
Evaluation
Balanced Scorecard
Key future ratios
Family Dollar Update
All Logos and Pictures from Family Dollar Media Kit
3/30/2009
© Tony Gauvin, UMFK, 2009
2
History
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3
The Founder
• Leon Levine
– Leon and his brother Al took over father’s retail
(general) store in Rockingham, AL when Leon was
13 years old (1947)
– In 1959 Leon opened first Family Dollar in
Charlotte, NC
– Passed the reins to his son Howard in 1998
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4
Growth
• By 1970’s, 100th store in Brevard, NC and had gone Public
– 30% per year
– Single distribution center in Charlotte delivering to Carolinas and
neighboring states
– 1982, 500th store in in Brunswick, GA
• 1980’s – War with Wal-Mart
– Added 100 stores per year in areas Wal-mart would not, stay within 3
miles of customer base (Big Box vs. Small box)
– Everyday Low-price guarantee  low margins
• 1990 -> 2000’s Supply Chain Management
– New Distribution centers and POS systems
– 2003 – 5000th store in Jacksonville FL
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5
2009
• 50th Anniversary
• 14% market share among “Dollar Stores”
– Lags Dollar General 22%
• 44,000 employees (19,000 part-time)
• 6600 stores in 44 states
• Target Customer
– “Female head of household in her mid 40’s making less
than $40,000/year”
• Revenue growth through new store growth
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6
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8
Existing vision
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9
Existing Mission
Family’s Dollar’s mission states the three most important
relationships to making our business successful; our
customers, our associates, and our investors.
For our customers, we offer a compelling place to work by
providing convenience and low prices;
For our associates, we offer a compelling place to work by
providing exceptional opportunities and rewards for
achievement;
For our investors, we offer a compelling place to invest by
providing outstanding returns
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10
NEW MISSION AND VISION
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Vision (proposed)
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12
Mission (Proposed)
At Family Dollar, we strive to bring the best to our customers, offering
everyday items at everyday low prices (1). We seek to meet our
customer’s basic needs, providing them with common household
products (2) at affordable prices while maintaining our growth and
profitability to our loyal stockholders (5) utilizing the latest technology
and through dedicated employees (4, 9). Our purpose has been to
open stores where we strongly believe we can be competitive while
meeting the demands of our customers (3). We continue to be
responsible by contributing back to communities, society and charitable
events (6, 7, 8).
1. Customer
2.
3.
4.
5.
6.
7.
8.
9.
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Products or services
Markets
Technology
Concern for survival, profitability, growth
Philosophy
Self-concept
Concern for public image
Concern for employees
13
SWOT
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14
SWOT
Strengths
Weakness
1.
1.
2.
3.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Sells essential items with relatively inelastic
demand
Healthy gross profit margin
Accepts food stamps
Lower than industry average leverage ratio
Being able to raise its dividends
Better than industry average total asset
turnover
Its return on assets of 1.84% is higher than
the industry average
Its return on equity is 4%, higher than the
industry average
Approximately 90% of the company’s
products are priced below $10
In the past year, the company’s stock has
outperformed the average retail industry
4/13/2015
4.
5.
6.
7.
8.
9.
Does not do much advertising
Limited market, solely in the U.S. only
In the year 2008, the company’s market
share dropped from 1.85% to 1.75%
The company’s EPS is only 72% of the
industry average and is not growing as
quickly as the industry average
Limited in variety of products being offered
For the year 2008, the company’s overall
sales only grew by 2.18% whereas the
average industry sales grew by 5.31%
Does not generate enough sales from its
web site due to limited technology
Higher than industry average quick ratio,
indicating lack of long term re-investment
The company’s long-term debt to equity
ratio is only 31.4% of the industry average
Copyright 2012, Tony Gauvin, UMFK
15
SWOT
Opportunities
Threats
1.
1.
2.
3.
4.
5.
The income for the middle class
is diminishing, causing them to
be more cautious with their
expenditures
The average household income
is dropping due to weak
economy
The demand for low-priced
items is growing
The unemployment rate is
increasing
Smaller retailers are closing their
stores and some have filed for
bankruptcy
4/13/2015
2.
3.
4.
5.
6.
7.
High competition among large
discount retailers
Dollar General has higher market
share compare to Family Dollar
Per square foot, Dollar General is
creating more sales
The industry is sensitive to
economic conditions
Change in demographics due to
purchasing habits
Increase in tariffs and trade
barriers
Lack of quality control in products
due to being imported from China
and other countries
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16
EXTERNAL AUDIT
4/13/2015
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17
CPM
Family Dollar
Dollar General
Weigh
t
Ratin
g
Weighte
d Score
Ratin
g
Weighte
d Score
Ratin
g
Weighted
Score
Store Locations
0.08
3
0.24
2
0.16
4
0.32
Merchandise Variety
0.12
2
0.24
1
0.12
3
0.36
Advertising
0.04
2
0.08
1
0.04
3
0.12
Customer Loyalty
0.05
2
0.10
1
0.05
3
0.15
Market Share
0.07
2
0.14
1
0.07
3
0.28
Customer Service
0.05
2
0.10
3
0.15
1
0.05
Product Quality
0.15
2
0.30
1
0.15
3
0.45
Price Competitiveness
0.15
2
0.30
1
0.15
3
0.45
Technology
0.05
1
0.05
2
0.10
3
0.15
Total
1.00
Critical Success Factors
4/13/2015
Dollar Tree
1.55
Copyright 2012, Tony Gauvin, UMFK
0.99
2.33
18
EFE
Weight
Rating
Weighted Score
0.1
4
0.4
0.1
3
0.3
The demand for low-priced items is growing
0.07
3
0.21
The unemployment rate is increasing
0.09
4
0.36
Smaller retailers are closing their stores and some have filed for
bankruptcy
0.08
3
0.24
High competition among large discount retailers
0.1
3
0.3
Dollar General has higher market share compare to Family Dollar
0.09
2
0.18
Per square foot, Dollar General is creating more sales
0.07
2
0.14
The industry is sensitive to economic conditions
0.08
3
0.24
Change in demographics due to purchasing habits
0.05
3
0.15
Increase in tariffs and trade barriers
0.07
1
0.07
Lack of quality control in products due to being imported from and
other countries
0.1
1
0.1
Key External Factors
Opportunities
1.
2.
3.
4.
5.
The income for the middle class is diminishing, causing them to be
more cautious with their expenditures
The average household income is dropping due to weak economy
Threats
1.
2.
3.
4.
5.
6.
7.
TOTAL
4/13/2015
1.00
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2.69
19
Positioning map
Strong Online
Shopping
(ecommerce)
WalMart
Dollar
Tree
Narrow Price
Competitive
Wide Price
Competitive
Family
Dollar
Dollar
General
Weak Online
Shopping
(ecommerce)
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20
INTERNAL AUDIT
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21
Organizational Chart
11 person Board
CEO & CHAIRMAN OF
THE BOARD
PRESIDENT AND COO
EVP SUPPLY CHAIN
DC MANGERS
DC MANGERS
EVP STORE
OPERATIONS
SVP GLOBAL
SOURCING
SVP SPACE
MANAGEMENT AND
INVENTORY
OPTIMIZATION
VICE CHAIR
SVP REAL ESTATE
AND FACILITIES
SVP CUSTOMER
MARKETING
SVP FOOD
SCP HARDLINES
SVP IT
SVP FINANCE
CIO
CFO
REGIONAL
MANAGERS
STORE MANGERS
STORE MANGERS
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22
Selected Financial Ratios
Growth Rates %
Sales (Qtr vs.. year ago qtr)
Net Income (YTD vs.. YTD)
Net Income (Qtr vs. year ago qtr)
Sales (5-Year Annual Avg.)
Net Income (5-Year Annual Avg.)
Dividends (5-Year Annual Avg.)
Price Ratios
Current P/E Ratio
P/E Ratio 5-Year High
P/E Ratio 5-Year Low
Price/Sales Ratio
Price/Book Value
Price/Cash Flow Ratio
Profit Margins %
Gross Margin
Pre-Tax Margin
Net Profit Margin
5Yr Gross Margin (5-Year Avg.)
5Yr PreTax Margin (5-Year Avg.)
5Yr Net Profit Margin (5-Year Avg.)
Financial Condition
Debt/Equity Ratio
Current Ratio
Quick Ratio
Interest Coverage
Leverage Ratio
Book Value/Share
4/13/2015
Family Dollar
Industry
S&P 500
2.60
25.00
13.10
6.98
2.46
9.94
-1.50
-1.50
1.70
9.16
7.53
20.58
-7.40
-3.40
25.20
13.14
12.60
11.84
Family Dollar
Industry
S&P 500
13.8
27.9
9.8
0.54
2.76
8.80
16.4
19.6
11.1
0.49
2.84
10.00
26.1
15.2
3.0
2.04
3.05
13.20
Family Dollar
Industry
S&P 500
34.8
6.1
3.9
33.7
5.5
3.5
24.3
5.0
3.2
23.7
5.3
3.5
36.6
9.6
6.7
37.8
16.6
11.5
Family Dollar
Industry
S&P 500
0.17
1.5
0.6
72.1
2.0
10.38
0.68
1.1
0.4
33.4
2.5
17.92
1.01
1.4
1.1
28.7
3.6
18.38
Copyright 2012, Tony Gauvin, UMFK
Source: www.moneycenteral.msn.com
23
Financial trends
08/09
08/08
09/07
08/06
08/05
08/04
08/03
08/02
09/01
08/00
08/09
08/08
09/07
08/06
08/05
08/04
08/03
08/02
09/01
08/00
4/13/2015
Avg P/E
Price/ Sales
13.80
13.30
18.80
19.00
21.60
23.10
23.10
25.50
21.90
18.70
0.58
0.50
0.64
0.57
0.58
0.87
1.46
1.19
1.41
0.97
Net Profit
Margin (%)
3.9
3.3
3.6
3.1
3.7
4.9
5.1
5.1
5.2
5.5
Book Value/ Share
Debt/ Equity
Return on Equity (%)
Return on Assets (%)
Interest Coverage
$10.38
$8.98
$8.19
$8.04
$8.64
$7.99
$7.51
$6.66
$5.57
$4.66
0.17
0.20
0.21
0.21
0.00
0.00
0.00
0.00
0.00
0.00
20.2
18.6
20.7
16.1
15.2
19.3
18.8
18.4
19.8
21.6
10.2
8.8
9.3
7.7
9.0
11.6
11.8
12.1
13.5
13.8
35.3
25.0
22.3
24.2
NA
NA
NA
2120.7
538.7
NA
Copyright 2012, Tony Gauvin, UMFK Source: www.moneycenteral.msn.com 24
IFE
Weight
Rating
Weighted
Score
1. Sells essential items with relatively inelastic demand
2. Healthy gross profit margin
3. Accepts food stamps
0.05
3
0.15
0.05
3
0.15
0.08
4
0.32
4. Lower than industry average leverage ratio
5. Being able to raise its dividends
0.05
3
0.15
0.03
3
0.09
6. Better than industry average total asset turnover
0.03
3
0.09
7. Its return on assets of 1.84% is higher than the industry average
0.02
3
0.06
8. Its return on equity is 4%, higher than the industry average
0.03
3
0.09
9. Approximately 90% of the company’s products are priced below $10
0.07
3
0.21
0.03
3
0.09
1. Does not do much advertising
2. Limited market, solely in the only
0.07
2
0.14
0.08
2
0.16
3. In the year 2008, the company's market share dropped from 1.85% to 1.75%
0.08
2
0.16
The company's EPS is only 72% of the industry average and is not growing
4. as quickly as the industry average
0.05
1
0.05
5. Limited in variety of products being offered
0.08
2
0.16
For the year 2008, the company's overall sales only grew by 2.18% whereas
6. the average industry sales grew by 5.31%
0.07
2
0.14
7. Does not generate enough sales from its web site due to limited technology
0.08
2
0.16
0.03
2
0.06
0.02
1
0.02
Key Internal Factors
Strengths
In the past year, the company’s stock has outperformed the average retail
10. industry
Weaknesses
Higher than industry average quick ratio, indicating lack of long term re8. investment
The company's long-term debt to equity ratio is only 31.4% of the industry
9. average
TOTAL
4/13/2015
Copyright 2012, Tony Gauvin, UMFK
1.00
2.45
25
STRATEGIC FORMULATION
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26
SWOT Matrix
Strengths
1.
Sells essential items with relatively inelastic
demand
2.
Healthy gross profit margin
3.
Accepts food stamps
4.
Lower than industry average leverage ratio
5.
Being able to raise its dividends
6.
Better than industry average total asset turnover
7.
Its return on assets of 1.84% is higher than the
industry average
8.
Its return on equity is 4%, higher than the industry
average
9.
Approximately 90% of the company's products are
priced below $10
10.
In the past year, the company's stock has
outperformed the average retail industry
Weaknesses
1.
Does not do much advertising
2.
Limited market, solely in the only
3.
In the year 2008, the company's market share
dropped from 1.85% to 1.75%
4.
The company's EPS is only 72% of the industry
average and is not growing as quickly as the
industry average
5.
Limited in variety of products being offered
6.
For the year 2008, the company's overall sales
only grew by 2.18% whereas the average industry
sales grew by 5.31%
7.
Does not generate enough sales from its web site
due to limited technology
8.
Higher than industry average quick ratio, indicating
lack of long term re-investment
9.
The company's long-term debt to equity ratio is
only 31.4% of the industry average
Opportunities
S-O Strategies
W-O Strategies
1.
The income for the middle class is diminishing, causing 1.
Implement some price cuts to improve sales (S2, 1.
Increase number of stores in low income areas
them to be more cautious with their expenditures
O1, S9, O3)
(O2, O1, W3, W2)
2.
The average household income is dropping due to
2.
Advertise to improve product variety and offerings 2.
Expand product offerings such fruits and other
weak economy
(S1, S2, S3, O4, O5)
perishable products (W3, W5, O3, O4, O5)
3.
The demand for low-priced items is growing
4.
The unemployment rate is increasing
5.
Smaller retailers are closing their stores and some have
filed for bankruptcy
Threats
1.
High competition among large discount retailers
2.
Dollar General has higher market share compare to
Family Dollar
3.
Per square foot, Dollar General is creating more sales
4.
The industry is sensitive to economic conditions
5.
Change in demographics due to purchasing habits
6.
Increase in tariffs and trade barriers
7.
Lack of quality control in products due to being
imported from and other countries
4/13/2015
S-T Strategies
1.
Due to better return on assets ratio, the company
can invest in technology, promoting online selling
(S6, T1, T5)
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W-T Strategies
1.
Increase advertising by offering discounts,
coupons, and other special offerings (W1, W2,
W3, T1, T2, T3, T4)
27
Space Matrix Data
Financial Stability (FS)
Return on Investment
Leverage
Liquidity
Working Capital
Cash Flow
3
2
3
2
3
Environmental Stability (ES)
Unemployment
Technological Changes
Price Elasticity of Demand
Competitive Pressure
Barriers to Entry
Financial Stability (FS) Average
2.6
Environmental Stability (ES) Average
Competitive Stability (CS)
Market Share
Product Quality
Customer Loyalty
Competition’s Capacity Utilization
Technological Know-How
-4
-3
-2
-3
-4
Industry Stability (IS)
Growth Potential
Financial Stability
Ease of Market Entry
Resource Utilization
Profit Potential
Competitive Stability (CS) Average
-3.2
Industry Stability (IS) Average
-1
-2
-3
-1
-2
-1.8
4
2
5
3
3
3.4
Y-axis: FS + ES = 2.6 + (-1.8) = 0.8 < 1
X-axis: CS + IS = (-3.2) + (3.4) = 0.2 < 1
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28
SPACE MATRIX
FS
6
Aggressive
Conservative
5
4
3
2
1
CS
-6
-5
-4
-3
-2
-1
1
2
3
4
5
6
IS
-1
-2
-3
-4
-5
Competitive
Defensive
-6
ES
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29
Grand Strategy Matrix
Rapid Market Growth
Quadrant I
Quadrant II
Strong
Competitive
Position
Weak
Competitive
Position
Quadrant III
4/13/2015
Slow Market Growth
Quadrant IV
Copyright 2012, Tony Gauvin, UMFK
1.
2.
3.
4.
5.
6.
7.
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Related Diversification
30
IE Matrix
The IFE Total Weighted Score
Strong
3.0 to 4.0
I
Average
2.0 to 2.99
II
Weak
1.0 to 1.99
III
IV
IV
VI
VII
VIII
IX
High
3.0 to 3.99
The EFE
Total
Weighted
Score
Medium
2.0 to 2.99
Low
1.0 to 1.99
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31
Matrix Analysis Summary
Alternative Strategies
SPACE
GRAND
COUNT
Forward Integration
x
X
2
Backward Integration
x
X
2
Horizontal Integration
x
X
2
x
X
3
x
X
2
x
X
3
Concentric
Diversification
x
X
2
Conglomerate
Diversification
x
1
Horizontal
Diversification
x
1
Market Penetration
IE
x
Market Development
Product Development
x
Joint Venture
Retrenchment
Divestiture
Liquidation
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32
QSPM
Key Factors
Opportunities
Weight
1. The income for the middle class is diminishing, causing them to be more cautious with their
expenditures
2. The average household income is dropping due to weak economy
3. The demand for low-priced items is growing
4. The unemployment rate is increasing
5. Smaller retailers are closing their stores due to lower sales
Increase number of
stores in low income
areas
AS
TAS
Increase advertising by
offering discounts,
coupons, and other
special offerings
0
TAS
0.1
3
0.3
2
0.2
0.1
0.07
0.09
0.08
4
3
2
3
0.4
0.21
0.18
0.24
3
2
3
2
0.3
0.14
0.27
0.16
1. High competition among large discount retailers
2. Dollar General has higher market share compare to Family Dollar
3. Per square foot, Dollar General is creating more sales
4. The industry is sensitive to economic conditions
5. Change in demographics due to purchasing habits
6. Increase in tariffs and trade barriers
7. Lack of quality control in products due to being imported from and other countries
0.1
0.09
0.07
0.08
0.05
0.07
0.1
1.00
1
--2
3
3
-----
0.10
--0.14
0.24
0.15
----1.96
2
--1
1
2
-----
0.20
--0.07
0.08
0.1
----1.52
1. Sells essential items with relatively inelastic demand
2. Healthy gross profit margin
3. Accepts food stamps
4. Lower than industry average leverage ratio
5. Being able to raise its dividends
6. Better than industry average total asset turnover
7. Its return on assets of 1.84% is higher than the industry average
8. Its return on equity is 4%, higher than the industry average
9. Approximately 90% of the company's products are priced below $10
10. In the past year, the company's stock has outperformed the average retail industry
0.05
0.05
0.08
0.05
0.03
0.03
0.02
0.03
0.07
0.03
1
2
4
2
--3
----4
3
0.05
0.1
0.32
0.1
--0.09
----0.28
0.09
2
4
3
1
--1
----3
2
0.1
0.2
0.24
0.05
--0.03
----0.21
0.06
0.07
0.08
0.08
0.05
1
3
4
---
0.07
0.24
0.32
---
3
2
2
---
0.21
0.16
0.16
---
0.08
0.07
2
2
0.16
0.14
1
3
0.08
0.21
0.08
0.03
0.02
1.00
1
--1
0.08
--0.02
2.06
4.02
2
--2
0.16
--0.04
1.91
3.43
Threats
TOTAL
Strengths
Weaknesses
1. Does not do much advertising
2. Limited market, solely in the only
3. In the year 2008, the company's market share dropped from 1.85% to 1.75%
4. The company's EPS is only 72% of the industry average and is not growing as quickly as the
industry average
5. Limited in variety of products being offered
6. For the year 2008, the company's overall sales only grew by 2.18% whereas the average industry
sales grew by 5.31%
7. Does not generate enough sales from its web site due to limited technology
8. Higher than industry average quick ratio, indicating lack of long term re-investment
9. The company's long-term debt to equity ratio is only 31.4% of the industry average
SUBTOTAL
SUM TOTAL ATTRACTIVENESS SCORE
4/13/2015
Copyright 2012, Tony Gauvin, UMFK
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IMPLEMENTATION
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Recommendations
1. Build additional stores in the U.S. Currently, many stores are closing and the
price of real estate has dropped, in some areas, as high as 60%. Opening
stores in lower priced areas or taking over a terminated lease can save the
company many start-up fees.
1. Build/acquire 200 stores/year for next 3 years
2. Grow to 7000+ stores by 8/2012
2. Build stores in rural / high demand areas where unemployment is high and
many are under state funding for food stamps.
1. Analysis: Current sales per sq foot ($6,984 million in sales / 6,600 stores
/ 7,500 average sq ft per store) = $141
2. Additional 200 stores x 7,500 average sq ft per store x $141 sales per sq
ft = + $211,500,000 increase in sales each year for the next three years.
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35
EPS/EBIT
$ Amount Needed: $20 million
Stock Price: $28.20
Tax Rate: 35.4%
Interest Rate: 5.00%
# Shares Outstanding: 138,797,782
EBIT
Interest
EBT
Taxes
EAT
# Shares
EPS
Common Stock Financing
Recession
Boom
$500,000,0
$375,000,000
00
$750,000,000
0
0
0
500,000,00
375,000,000
0
750,000,000
177,000,00
132,750,000
0
265,500,000
323,000,00
242,250,000
0
484,500,000
139,507,00
139,507,002
2
139,507,002
1.74
2.32
3.47
70 Percent
Stock - 30
Percent Debt
Recession
4/13/2015
EBIT
Interest
$375,000,000
800,000
EBT
374,200,000
Taxes
132,466,800
EAT
241,733,200
# Shares
EPS
139,294,236
1.74
$500,000,0
00
800,000
499,200,00
0
176,716,80
0
322,483,20
0
139,294,23
6
2.32
Debt Financing
Recession
Boom
$375,000,000
1,000,000
$500,000,000
1,000,000
$750,000,000
1,000,000
374,000,000
499,000,000
749,000,000
132,396,000
176,646,000
265,146,000
241,604,000
322,354,000
483,854,000
138,797,782
1.74
138,797,782
2.32
138,797,782
3.49
Boom
70 Percent
Debt - 30
Percent
Stock
Recession
$750,000,000
800,000
$375,000,000
200,000
$500,000,000
200,000
$750,000,000
200,000
749,200,000
374,800,000
499,800,000
749,800,000
265,216,800
132,679,200
176,929,200
265,429,200
483,983,200
242,120,800
322,870,800
484,370,800
139,294,236
3.47
139,010,548
1.74
139,010,548
2.32
139,010,548
3.48
Copyright 2012, Tony Gauvin, UMFK
Boom
36
Projected Financials
• Assumptions
– Borrow $20 million over 5 years @ 5%
• 1 million interest in first year
– Open 200 more stores per year
• $100 K in equipment per store
• Leases and inventory @ existing rates and expensed
from revenue
• Depreciation over 5 year life $4m per annum
– Generate $211.5 million additional income
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Projected Income Statement
2009
2010 Projected
revenues
7,400.60
7,612.10
total revenues
7,400.60
7,612.10
cost of goods sold
4,822.40
4,960.22
gross profit
2,578.20
2,651.88
selling general & admin expenses, total
2,120.90
2,181.51
other operating expenses, total
2,120.90
2,181.51
operating income
457.3
470.37
interest expense
-12.9
-13.90
6.6
6.60
-6.3
-7.30
ebt, excluding unusual items
450.9
463.07
ebt, including unusual items
450.9
463.07
income tax expense
159.7
164.01
earnings from continuing operations
291.3
299.06
Net Income
291.3
299.06
0.53
0.57
139.894
139.894
interest and investment income
net interest expense
Dividends
Shares Outstanding (basic)
Retained earnings
EPS
4/13/2015
Comments
Add $211.5 millions additional revenue
% of sales method
% of sales method
additional $ 1 million interest
same
0.354181 tax rate
add 0.04 per annum
219.32
2.08
2.14
Copyright 2012, Tony Gauvin, UMFK
In millions
except for
EPS
38
Projected Balance Sheet
Assets
cash and equivalents
short-term investments
total cash and short term investments
other receivables
total receivables
inventory
prepaid expenses
deferred tax assets, current
total current assets
gross property plant and equipment
accumulated depreciation
net property plant and equipment
long-term investments
other long-term assets
total assets
liabilities & equity
accounts payable
accrued expenses
current portion of long-term debt/capital lease
current income taxes payable
other current liabilities, total
total current liabilities
long-term debt
deferred tax liability non-current
other non-current liabilities
total liabilities
common stock
additional paid in capital
retained earnings
treasury stock
comprehensive income and other
total common equity
total equity
total liabilities and equity
4/13/2015
438.9
5.8
444.7
12.6
12.6
993.8
59.2
82.7
1,593.00
2,190.10
-1,133.70
1,056.40
163.50
64.8
2,877.80
663.76
5.8
669.56
12.6
12.6
1,023.92
60.99
85.21
1,852.28
2,210.10
-1,134.70
1,075.40
163.50
64.80
3,155.98
adjust
528.1
285.5
544.1030303
294.1515152
add 200/6600
add 200/6600
1.7
91.1
906.3
250
44.8
236.6
1,437.70
14.5
210.3
1,387.90
-163.8
-9
1,440.10
1,440.10
2,877.80
1.8
91.1
931.1545455
270
50
236.6
1,487.75
14.5
210.3
1,607.22
-163.8
-9
1,668.22
1,668.22
3,155.97
fudge
same
0.00
Add 200/6600 more
Add 200/6600 more
add 20 million
add 4 million
same
same
--
Copyright 2012, Tony Gauvin, UMFK
add 20 million
fudge
same
same
same
add retained earnings
same
same
39
EVALUATION
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Balanced Score Card
Area of Objectives
Measure or Target
Time
Expectation
Primary Responsibility
Customers
1
Satisfaction
Customer Survey results
Yearly
Marketing Department
2
Brand Identity
Industry Reports
Yearly
Marketing Department
Employees
1
Quality and service training
On site and webinars
Yearly
COO
2
Employee Satisfaction
Survey
Yearly
Human resources
Operations/Processes
1
Productivity
Sales/man-hour increase 2%
Quarterly
COO
2
On tine delivery
Percentage unfilled shelf space
Quarterly
COO
volume of recyclable materials per store
Quarterly
COO
# of ethics training sessions
Yearly
Human resources
1 Sales and expenses reports
2% sales increase
2% expense reduction
Quarterly
CFO
2
better than Industry Avg,
Yearly
CFO
Business Ethics/Natural
Environment
1
Waste reduction
2 Ethics Training
Financial
Ratio analysis
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Projected Ratios
2009
2010 projected
2011 targets
1.76
0.66
1.99
0.89
2
1
Debt-to-Total Assets Ratio
Debt-to-equity Ratio
0.50
1.00
0.47
0.89
0.5
0.85
Long-term debt-to-equity Ratio
Times-Interest-earned Ratio
0.17
35.45
0.16
33.84
0.15
36
7.45
7.01
2.57
7.43
7.08
2.41
7.5
7.1
2.6
Gross Profit margins
Operating Profit Margin
Net Profit Margin
Return on Total Assets
0.35
0.06
0.04
0.10
0.35
0.06
0.04
0.09
0.38
0.07
0.05
0.11
Return on Stockholders equity
Earning per share
Price-earnings Ratio
0.20
2.08
14.54
0.18
2.14
20.02
0.25
2.25
15-20
Liquidity Ratios
Current Ratio
Quick Ratio
Leverage Ratios
Activity Ratios
Inventory Turns
Fixed Assets Turnover
Total Assets Turnover
Profitability Ratios
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FDO Update
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FDO Updates
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Stock Price History
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Questions?
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Sources
•
•
•
•
•
•
•
•
•
"Family Dollar Stores, Inc." International Directory of Company Histories, Vol.62. St. James
Press, 2004
Top Dollar Stores, 2009." 'Analyst & Investor Day.' [online] from
http://www.bicworld.com/img/pdf/ADAY_FINAL_CP_DISTRIBUTION.pdf [Published March
31, 2010], from MVI-Insights and USA Overview and Growth Forecast. Market Share
Reporter 2011.
Datamonitor “Family Dollar Stores, Company profile 2009”, www.datamonitor.com , 13 Apr
2010
“Family Dollar 2010 Analyst and Investor Update”, www.familydollar.com, Investor Relations
“Morgan Stanley 2011 Global Consumer Conference Presentation”, www.familydollar.com,
Investor Relations
“Family Dollar Annual Report, 2009””, www.familydollar.com, Investor Relations
Family Dollar Stores, Inc. – 2009, Joseph W. Lenard, Miami University, published in Strategic
Management, concepts and Cases 13th edition, Fred David
Family Dollar Stores, Inc. – 2009, case notes, Dr. Mernoush Banton
Yahoo Finance,
http://finance.yahoo.com/echarts?s=FDO+Interactive#symbol=fdo;range=my;compare=^gspc
;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
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