MAJOR PROJECTThe paper is on Dollar Tree Family DollarMy part of the paper is highlighted in yellow needs to be 500 words or less.Its a continuation of the minor project I submitted. I’ll include for your reference.
major_project_dollar_tree_family_dollar.docx
minor_project_trend_analysis_dollar_tree_family_dollar_1.docx
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MAJOR PROJECT
The paper is on Dollar Tree Family Dollar
This is a group project (groups of 2 or 3) and is a continuation of the minor project. Select one of
the companies identified by a member of the group.
Major Project: In your teams, select one of the companies examined in the Minor Project and
evaluate the firm using the tools from class. You need to determine the following:
a. The value of the firm The WACC
a. The value of the debt
b. The value of the equity
b. The WACC
c. The market value of the firm
d. The CAPM
e. Compare the firm to its two main competitors
f. The firm’s story and prospects and non-quantitative factors
g. Would you invest in this firm? (Be sure to consider both projects to answer this)
h. The paper should contain 1500 words.
Running: DOLLAR TREE FAMILY DOLLAR
Minor Project Trend Analysis Dollar Tree Family Dollar
BUSN 320 Financial Management
23 November 2019
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Trend Analysis Dollar Tree Family Dollar
Dollar Tree and Family Dollar have become one great company that offers two brands at
discount variety retail stores. Dollar Tree, Inc is a leading operator of discount variety stores
across the continental U.S. and Canada for over thirty years. Dollar Tree has over 6,776 stores
and Family Dollar has over 8,236 stores with over a combined total 15,00+ stores operating
today. The company is supported coast to coast with over 182,000 associates.
The beginnings of Dollar Tree established its roots more than 60 years ago in Wards
Corner, Norfolk Virginia. In the early days the company started out as K.R. Perry and Ben
Franklin variety stores. The son of K.R. Perry, Doug Perry, started his venture into the $1.00
retailing. This highly successful concept was known the single price selling point was so
appealing it lead to the building of a chain of stores from the east coast to the west coast.
Family Dollar was established in 1958 by a young 21-year-old entrepreneur named Leon
Levine. Having grew up in his family’s retail store he understood the business of retail and had
the idea of operating a self-service store while operating with a low overhead. Working in his
family’s store he developed a good understanding of how valuable it is to have loyal customer
satisfaction. His idea was to offer good-quality, and a variety of high-value quality merchandise
at a price under $2. Today Family Dollar has a host of merchandise for the whole family that
includes home-fashions, beauty aids, toys, apparel, and brand-name foods. Customers can find
items many for $1 and under while most merchandise can be found for $10 and under, which is
great for the middle class family.
Dollar Tree Family Dollar is now the leading company operating discount variety stores
in North America. The company believes that the key factor for a continued growing customer
base is the value and convenience that is offered. As of February 2, 2019 Dollar Tree, Family
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Dollar and Dollar Tree Canada now operates 15,237 discount variety stores across North
America. “On July 6, 2015, we completed our purchase of Family Dollar Stores, Inc. and it’s
more than 8,200 stores. This transformational transaction created the largest discount retailer (by
store count) in North America. The Dollar Tree and Family Dollar brands have complementary
business models. Everything is $1.00 at Dollar Tree stores while Family Dollar is a
neighborhood variety store offering merchandise largely for $10.00 or less” Guiler, R. (2019).
What defines and company and what they stand for can be found the company vision,
mission and values statement. It defines purpose and the reason for the company’s existence.
When the employees of any company understands this it improves the organizations
performance, productivity and success. It results in a better, positive work culture and a higher
level of employee engagement as they go about their daily tasks.
Dollar Tree Mission Statement
“Dollar Tree, Inc. is a customer-oriented, value-driven variety store operating at a one dollar
price point. We will operate profitably, empower our associates to share in its opportunities,
rewards and successes; and deal with others in an honest and considerate way. The company’s
mission will be consistent with measured and profitable growth”.
Dollar Tree Vision Statement
“The Dollar Tree, Inc. is a customer oriented, furthermore it is a value-driven store which
operates at a one dollar price. According to the mission statement, the store operates profitably,
and empowers its associates so that they can share in its opportunities and the utmost successes.
The store also believes in dealing with others in an honest and considerate way. The company
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mission is formulated in such a manner that it is consistent with the measured and profitable
growth” Barbe, M. (2019).
Corporate social responsibility (CSR) is just as important as the mission, vision and
values statement. It describes the company’s efforts to contribute and improve society by
donating money to a non-profit organization also establishing environmental friendly policies to
better the work place. Giving back to the community create a positive social value and boost
employee morale.
Philanthropy
“We are committed to bolstering the quality of life in the communities surrounding our store
support centers, our 23 distribution centers and our nearly 15,000 stores. From financial
donations, to associate volunteerism and partnerships with non-profit organizations, we are
determined to make a difference” Corporate Sustainability Report (2019).
Dollar Tree Inc. is a proud sponsor of many non-profit organizations such as Operation Home
Front, American Diabetes Association, American Cancer Society, Foodbank and Boys & Girls
Clubs of America.
Dollar Tree annual/quarterly revenue history and growth rate from 2015 to 2019 as
follows. Revenue is generated from the selling of merchandise during a regular business day/year
which includes deductions and discounts. Net income is determined by subtracting cost form
gross income. Revenue is the common denominator in calculation many other ratios as well so
it’s extremely important to earn net revenue as early as possible as to stay in the green in all
financial statements.
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Dollar Tree revenue for the quarter ending July 31, 2019 was $5.741B, a 3.89% increase yearover-year.

Dollar Tree revenue for the twelve months ending July 31, 2019 was $23.293B, a 2.36%
increase year-over-year.

Dollar Tree annual revenue for 2019 was $22.823B, a 2.6% increase from 2018.

Dollar Tree annual revenue for 2018 was $22.246B, a 7.37% increase from 2017.

Dollar Tree annual revenue for 2017 was $20.719B, a 33.69% increase from 2016.
Dollar Tree Revenue 2006-2019 (2019, May 1).
DOLLAR TREE FAMILY DOLLAR

Dollar Tree gross profit for the quarter ending July 31, 2019 was $1.649B, a 0.93%
decline year-over-year.

Dollar Tree gross profit for the twelve months ending July 31, 2019 was $6.960B,
a 2.4% decline year-over-year.

Dollar Tree annual gross profit for 2019 was $6.948B, a 1.06% decline from 2018.

Dollar Tree annual gross profit for 2018 was $7.022B, a 9.81% increase from 2017.

Dollar Tree annual gross profit for 2017 was $6.395B, a 37.32% increase from 2016.
Dollar Tree Revenue 2006-2019 (2019, May 1).
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Dollar Tree net income for the quarter ending July 31, 2019 was $0.180B, a 34.17%
decline year-over-year.

Dollar Tree net income for the twelve months ending July 31, 2019 was $-1.577B,
a 191.99% decline year-over-year.

Dollar Tree annual net income for 2019 was $-1.591B, a 192.8% decline from 2018.

Dollar Tree annual net income for 2018 was $1.714B, a 91.29% increase from 2017.

Dollar Tree annual net income for 2017 was $0.896B, a 217.35% increase from 2016.
Dollar Tree Revenue 2006-2019 (2019, May 1).
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Dollar Tree Inc. efforts to determine shareholder value will be based on the company’s ability to
earn on sales at a high level. It’s very important that revenue is turned net income and this done
by Profit Margin = Net Income ÷ Revenue which is Profit Margin = US$1.67b ÷ US$22.51b =
7.44%. Over the past five years Dollar Tree Inc. had an average growth of 22.71% exceeded the
14.78% average net income growth. This means a smaller percentage of revenue is turning into
net income. Simply Wall St. (2018, June 13).
Dollar Tree Inc. acquired Family Dollar back in July 2015 thus, the business is now
divided into two separate segments and operates under the widely recognized banners we all are
accustom to seeing. Dollar Tree Inc. wants to draw in customers with as many visits as possible
with the “thrill of the hunt” experience. Every week there’s something new to be found in Dollar
Tree. While shopping at Dollar Tree unlike Family Dollar that continues to draw in customers
for the “family” experience shopping for more on the grocery side with items costing $10 and
below. The two separate entities almost have the same revenue just slightly different in some
areas. The chart below demonstrates how the last two quarters in 2018 measured. Basically $11.1
billion was almost evenly split between Dollar Tree and Family Dollar.
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I believe Dollar Tree Inc. growth strategy has been aggressive for many years since 1995.
Dollar Tree Inc. has over 15,00 variety stores through mergers and acquisitions and makes it the
largest variety store chain in North America. I write this paper as a new member to the Dollar
Tree team. I am a Transportation Maintenance Analysis working at the new corporate world
headquarters office tower located at the Greenbrier business community at Summit Pointe in
Chesapeake, VA.
DOLLAR TREE FAMILY DOLLAR
Reference
Dollar Tree Revenue 2006-2019: DLTR. (2019, May 1). Retrieved November 21, 2019, from
https://www.macrotrends.net/stocks/charts/DLTR/dollar-tree/revenue.
Barbe, M. (2019). Dollar tree Mission, vision & values. Retrieved November 20, 2019, from
https://www.comparably.com/companies/dollar-tree/mission
Corporate Sustainability Report. (2019). Retrieved 2019, from
https://www.dollartree.com/file/general/corporate-sustainability-report.pdf
Guiler, R. (2019). DOLLAR TREE COMPLETES ACQUISITION OF FAMILY DOLLAR.
Retrieved from https://www.dollartreeinfo.com/news-releases/news-release-details/dollar-treecompletes-acquisition-family-dollar
Sharma, A. (2018, September 6). Why Dollar Tree and Dollar General Shares Are Headed in
Different Directions. Retrieved from https://www.fool.com/investing/2018/09/06/whydollar-tree-and-dollar-general-shares-are-head.aspx.
Simply Wall St. (2018, June 13). What Are Analysts Saying About the future of Dollar Tree
Inc’s (NASDAQ:DLTR)? Retrieved from https://simplywall.st/stocks/us/retail/nasdaqdltr/dollar-tree/news/what-are-analysts-saying-about-the-future-of-dollar-tree-incsnasdaqdltr/.
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