Family Dollar, Inc.
In accordance to the article, What You Can Learn From Shareholder Letters, written by Eric R. Heyman, the Family Dollar shareholder letter is written concisely and provides shareholders with an overview summary about fiscal year 2013 and the direction the company is moving towards. It gives the shareholders and potential investors an insight into what the company believes are pivotal strategies designed to remain competitive in the retail industry- highly competitive. Within, this shareholders letter, Howard R. Levin, Family Dollar Chairman/CEO, discussed business performance, sustainable growth and profitability, achievements and challenges, target customers, new business partnerships, future goals, and the company’s history. For instance, the Family Dollar shareholder letter acknowledges that the establishment has been in existence since 1959 and a publicly traded company since 1970. Also, it has maintained the goal of offering name brands products at a discounted price while providing convenient store locations.
In addition, the letter addressed how the 2013 economic downward spiral in the United States caused consumers to purchase discounted products from Family Dollar. The CEO pointed out that this economic uncertainty resulted in an increase of “net sales by 11.4% for 2013 in comparison to the previous fiscal year and recorded operating profit of $688 million, a 3.6% increase (www.sec.gov) ”. Also, this letter explained that “830 Family Dollar stores were selected to be either renovated, relocated, or expanded (www.sec.gov)” so that the organization can continue to be competitive. Its focus is to provide a better shopping experience that appeal to a broader customer base. In hopes that this re-branding builds customer loyalty, so customers choose to shop at Family Dollar. After reviewing a shareholder’s letter, investors can determine whether or not a particular company could be a good investment. To ensure that all information coincides with the shareholder’s letter, investors should still review information and financial statements located in the 10-Q and the 10-K reports.
Financial statements can definitely seem like a maze more so than a map to most users as discussed in the PowerPoint slides for Chapter one: Financial statements: An Overview. Because of the lack of understanding, many users quickly become frustrated before getting through the entire annual report. When learning how to use financial statements as maps, the user will can make better informed investment decisions. The financial statement analysis workbook exercises are a helpful tool to learn where to find information in the 10-K reports using the EDGAR Database. Also, reading the news release from the company’s website provides additional information about what is occurring within the company, annulments of the 10-Q, 10-K and 8-K reports, and dividends paid to stockholders.
Also, the annual report discussed the company background, risk...