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Dollar Tree (MEX:DLTR) Altman Z-Score : 2.17 (As of Dec. 13, 2024)


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What is Dollar Tree Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Warning Sign:

Altman Z-score of 2.26 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

Dollar Tree has a Altman Z-Score of 2.17, indicating it is in Grey Zones. This implies that Dollar Tree is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Dollar Tree's Altman Z-Score or its related term are showing as below:

MEX:DLTR' s Altman Z-Score Range Over the Past 10 Years
Min: 1.83   Med: 2.98   Max: 9.68
Current: 2.26

During the past 13 years, Dollar Tree's highest Altman Z-Score was 9.68. The lowest was 1.83. And the median was 2.98.


Dollar Tree Altman Z-Score Historical Data

The historical data trend for Dollar Tree's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Dollar Tree Altman Z-Score Chart

Dollar Tree Annual Data
Trend Jan15 Jan16 Jan17 Jan18 Jan19 Jan20 Jan21 Jan22 Jan23 Jan24
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.67 3.02 3.25 3.55 2.95

Dollar Tree Quarterly Data
Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24 Jul24 Oct24
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.02 2.95 2.84 2.57 2.21

Competitive Comparison of Dollar Tree's Altman Z-Score

For the Discount Stores subindustry, Dollar Tree's Altman Z-Score, along with its competitors' market caps and Altman Z-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Dollar Tree's Altman Z-Score Distribution in the Retail - Defensive Industry

For the Retail - Defensive industry and Consumer Defensive sector, Dollar Tree's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Dollar Tree's Altman Z-Score falls into.



Dollar Tree Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Dollar Tree's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.0094+1.4*0.3273+3.3*-0.0318+0.6*0.9882+1.0*1.2141
=2.17

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Oct. 2024:
Total Assets was MXN467,389 Mil.
Total Current Assets was MXN132,838 Mil.
Total Current Liabilities was MXN128,467 Mil.
Retained Earnings was MXN152,988 Mil.
Pre-Tax Income was 6125.602 + 3239.685 + 6759.13 + -32930.211 = MXN-16,806 Mil.
Interest Expense was -550.863 + -537.468 + -416.366 + -451.734 = MXN-1,956 Mil.
Revenue was 151601.641 + 137227.233 + 130247.626 + 148400.651 = MXN567,477 Mil.
Market Cap (Today) was MXN310,712 Mil.
Total Liabilities was MXN314,427 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(132838.229 - 128467.377)/467388.649
=0.0094

X2=Retained Earnings/Total Assets
=152987.814/467388.649
=0.3273

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(-16805.794 - -1956.431)/467388.649
=-0.0318

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=310711.611/314426.876
=0.9882

X5=Revenue/Total Assets
=567477.151/467388.649
=1.2141

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Dollar Tree has a Altman Z-Score of 2.17 indicating it is in Grey Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Dollar Tree  (MEX:DLTR) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Dollar Tree Altman Z-Score Related Terms

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Dollar Tree Business Description

Address
500 Volvo Parkway, Chesapeake, VA, USA, 23320
Dollar Tree operates discount stores across the United States and Canada, with over 8,600 shops under its namesake banner and nearly 7,800 under Family Dollar. About 47% of Dollar Tree's sales in fiscal 2023 were composed of consumables (including food, health and beauty, and cleaning products), around 45% from variety items (including toys and homewares), and over 5% from seasonal items. The Dollar Tree banner sells most of its merchandise at the $1.25 price point and positions its stores in well-populated suburban markets. Conversely, Family Dollar primarily sells consumable merchandise (80% of the banner's sales) at prices below $10. About two-thirds of Family Dollar's stores are located in urban and suburban markets, with the remaining one-third located in rural areas.