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Compute the ratios for the current and past year for Dollar Tree In. on the Ratio and Comments worksheet.

Compute the ratios for the current and past year for Dollar Tree In. on the Ratio and Comments worksheet.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 3E
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Compute the ratios for the current and past year for Dollar Tree In. on the Ratio and Comments worksheet.

Dollar Tree, Inc. Common Size Income Statement Total revenue Cost of sales Selling, general and administrative expenses Operating income Interest expense, net Other expense, net Income before income taxes Provision for income taxes Net income 12 Months Ended Jan. 28, 2023 28,331.7 19,396.3 6,699.1 2,236.3 125.3 0.4 2,110.6 495.2 $ 1,615.4 Jan. 29, 2022 Jan. 30, 2021 26,321.2 18,583.9 5,925.9 1,811.4 178.9 0.3 1,632.2 304.3 $ 1,327.9 25,509.3 17,721 5,900.4 1,887.9 147.3 0.8 1,739.8 397.9 $ 1,341.9 Jan. 28, 2023 Percentages Jan. 29, 2022 Jan. 30, 2021 a. Review the vertical analysis and provide the two largest expenses for the current year. Explain the trend over the three years for these two expenses and discuss how these costs affects net earnings. b. Discuss the fluctuations in interest expense. What are reasons that could cause changes in interest expense? You need to provide specific causes for the applicable company that relates specifically to the interest expense. c. Discuss the fluctuations in income tax expense. What are reasons that could cause changes in income tax expense? You need to provide specific causes for the applicable company that relates specifically to the income tax expense. d. Was the company more or less profitable when compared to the prior year? Using the specific income statement ratios or amounts, explain what caused the change in income from the prior year.
Transcribed Image Text:Dollar Tree, Inc. Common Size Income Statement Total revenue Cost of sales Selling, general and administrative expenses Operating income Interest expense, net Other expense, net Income before income taxes Provision for income taxes Net income 12 Months Ended Jan. 28, 2023 28,331.7 19,396.3 6,699.1 2,236.3 125.3 0.4 2,110.6 495.2 $ 1,615.4 Jan. 29, 2022 Jan. 30, 2021 26,321.2 18,583.9 5,925.9 1,811.4 178.9 0.3 1,632.2 304.3 $ 1,327.9 25,509.3 17,721 5,900.4 1,887.9 147.3 0.8 1,739.8 397.9 $ 1,341.9 Jan. 28, 2023 Percentages Jan. 29, 2022 Jan. 30, 2021 a. Review the vertical analysis and provide the two largest expenses for the current year. Explain the trend over the three years for these two expenses and discuss how these costs affects net earnings. b. Discuss the fluctuations in interest expense. What are reasons that could cause changes in interest expense? You need to provide specific causes for the applicable company that relates specifically to the interest expense. c. Discuss the fluctuations in income tax expense. What are reasons that could cause changes in income tax expense? You need to provide specific causes for the applicable company that relates specifically to the income tax expense. d. Was the company more or less profitable when compared to the prior year? Using the specific income statement ratios or amounts, explain what caused the change in income from the prior year.
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