Determining a company’s financial health is a very important step in making a decision whether or not to invest or to stay invested. There are many different ways to compute a company’s financial health. In this test, I will be taking into consideration Dollar Tree Incorporation’s (DLTR) profitability, debt and capital, and operating efficiency. Based on this criteria, we get to see sales, returns, margins, liabilities, assets, returns and turnovers.
Profitability is a class of financial metrics that are used to assess a business’ ability to generate earnings as compared with expenses and other relevant costs incurred during a specific period of time.
In this section we will look at four tests of profitability. They are: Net Income, Operating Cash Flow, Return on Assets and Quality of Earnings. From these four metrics, we will establish if the company is making money and gauge the quality of the reported profits.
To Read more: Dollar Tree: Inside The Numbers