FAMILY DOLLAR INC.

Family Dollar Inc.

Family Dollar Inc.

Introduction

Every organisation aims to maintain its market dominant position as well as to maximise its profitability through a series of activities, so as to remain competitive within framework of the market mechanism and to advance functions. (Holmes, Sugden, Gee, 2002) It is necessary for managers to be familiar with the overall performance of the enterprise, in an effort to develop an effective strategic plan for companies' prosperity and progress. Thus it is essential to identify the capabilities of a company in economic terms, so as to enable first line management to determine the business's objectives and targets, concerning its operations.

In an effort to examine an organisation in financial terms, so as to provide managers with sufficient information, referring to its economic evolution, certain financial statements have evolved, such as Balance Sheet, Trial Balance, Profit and Loss Account, Ratios and so on. (Holmes, Sugden, Gee, 2002)

A company's published report and accounts will contain a confusing set out of figures. Whilst these figures will all be based on historical facts and can be taken as accurate, a question arises; what do these figures mean? An answer to these question will require an analysis of the figures contained within published report and accounts, using a series of Financial Ratios.

In this assessment, we will analyse and critically evaluate the most common financial ratios by incorporating examples relevant to Family Dollar Inc. This assessment will be focusing mainly on the company Family Dollar Inc ; we will also compare the results to those of MG Rover Group Limited. These financial ratios have been applied according to most recent figures that appear on the Athens-Fame electronic library. (Holmes, Sugden, Gee, 2002)

1. Introduction

1.1 Purpose

Generally, the purpose of this report is to analyze the profitability of Family Dollar Inc and non-Family Dollar Inc financial institution. Particularly, this report will discuss Family Dollar Inc profitability to be compared each other; also, discuss the risks that Family Dollar Inc has taken. (Holmes, Sugden, Gee, 2002)

1.2 Background

Family Dollar Inc as a financial institution must be different from a non-Family Dollar Inc financial institution in case of using their capital to compete in raising equity capital in the market. Hence, Family Dollar Inc has its own strategy to compete while other financial institution has its own strategy as well.

1.3 Scope

Because the strategy that is used by a Family Dollar Inc and a non-Family Dollar Inc financial institution can be seen from many perspectives, this report will only discuss the differences of profitability of Family Dollar Inc and non-Family Dollar Inc financial institution and how they compete each other to raise equity capital in the market.

Accounting Ratios

A ratio analysis transforms accounting numbers into meaningful ratios that highlight strengths and weaknesses of a business. This analysis does not require a thorough understanding of accounting or finance to be used.

There are many different groups of people (or stakeholders) who are interested in the accounts of a company, including:

1) The management and the employees - to see if pay rises are ...