answer for question 1 part 1

2. Estimate the closing share price for Dollarama at Jan 31, 2021 (do the best you can, it won't be a precise measurement). i) Multiply your estimated Jan 31, 2021 share price by 310,266,429. This is the exact number of common shares outstanding at Jan 31, 2021 (and is close to the weighted average number of common shares outstanding throughout all of fiscal 2021, which you used in part 1 i)). The value you have calculated is referred to as Dollarama's 'market capitalization at Jan 31, 2021. ii) Compare the market capitalization value you calculated in part 3 1) to the Jan 31, 2021 value for total shareholders equity on the statement of financial position is the market capitalization higher, lower, or equal to total shareholders' equity? ii) Should the 'market capitalization' you calculated be equal to the amounts shown for shareholders' equity on the company's financial statements? Explain (why or why not). (Hint: How are the values for shareholders' equity in the balance sheet determined? What type of factors influence market share price? If you believe there is no relationship between the market capitalization and the amount of shareholders' equity in the balance sheet. explain why not.) Dollarama Inc. Consolidated Statements of Net Earnings and Comprehensive Income for the years ended (Expressed in thousands of Canadian dollars, except share and per share amounts) Note January 31, 2021 February 2 2020 17 3.757295 4026259 2.261 240 1,765011 554032 209,633 119656 361 000 95,640 1.682353 551 2015 17 9 17 100.505 12.835 765.354 201006 13 770,367 205328 354039 554 348 (400) Sales Cost of sales Gross profit General, administrative and store operating expenses Depreciation and amortization Share of net eamings of equity accounted investment Operating income Financing costs Other income Earnings before income taxes Income taxes Net earnings Other comprehensive income Items that may be reclassified subsecondly to not eating Realized losses on financial instruments not subject to basis adjustment Reclassification of losses on derivative financial instruments not subject to basis adjustments Foreign currency translation adjustments Share of other comprehensive income (los) of equity-accounted investment Income tax recovery relating to these terms ems that will not be rectassified subsequently to net carings Unrealized gains (losses) on derivative financial instruments subject to bass adjustments Income tax recovery expense) relating to these tems Total other comprehensive income (los). net of income taxes Total comprehensive income Earnings per common share Basic net earnings per common share Diluted net earnings per common share Weighted average number of common shares outstanding (thousands Weighted average number of diluted common shares outstanding (housands) (354) (8.061) (378) (547) (3588) 240 907 49 (27.750) 7.353 12.537 13.331 9237 32.520) 631728 573275 15 15 $1 82 31.81 $180 $1.78 15 310,738 313.910 15 312.455 317.185 The accompanying notes are an integral part of these consolidated financial statements Dollarama Inc. Consolidated Statements of Financial Position as at (Expressed in thousands of Canadian dollars) Note January 31, 2021 February 2 2020 Assets 439.144 20.546 9549 90.654 34 965 9.935 1,767 623.490 3870 764.497 14 630.655 466 1,100.362 Current assets Cash Accounts receivable Prepaid expenses Prepaid income taxes Inventories Derivative financial instruments Non-current assets Right-of-use assets Property, plant and equipment Intangible assets Derivative financial instruments Goodwill Equity-accounted investment Total assets 1,283,778 644,011 552 957 678488 B 14 1 344 639 709.469 161.791 314 727.782 179 389 4223.745 9 727 782 143421 3.715,450 10 289 254 13,737 267 14 6 Liabilities and shareholders' equity (deficit) Current liabilities Accounts payable and accrued liabilities Dividend payable Derivative financial instruments Income taxes payable Current portion of long-term debt Current portion of lease fiabilities Non-current liabilities Non-current portion of long-term debt Non-current portion of lease abilities Deferred income taxes Total liabilities Commitments Shareholders' equity (deficit) Share capital Contributed surplus Deficit Accumulated other comprehensive income (oss) Total shareholders' equity (deficit) Total liabilities and shareholders' equity (deficit) 253,072 14 583 25.821 12,975 832,821 181 893 1,321,165 1.044 079 1.401,769 121,879 606,494 182 732 1,092 484 11 6 13 1,270,289 1,332 016 113 863 3.808 652 3,688,892 . 12 12 12 12 485 487 28 527 (149,983) (29. 177) 334 854 448,704 29,105 (574,110) 4102 (92 196) 3716 456 4223,746 Approved by the Board of Directors Lone Stephen Gunn Slephen Gunn, Director saned "Richard Roy Richard Roy, Director The accompanying notes are an integral part of these consolidated financial statements 1. On the consolidated statements of net earnings and comprehensive income on page 3, find the basic earnings per common share amount provided near the bottom, which is NOT in thousands of dollars. i) Prove the calculation of the basic earnings per share of $1.82 in fiscal 2021 (subject to small rounding error). You will need to know the weighted average number of common shares outstanding in the fiscal year which is also provided at 310,738,000. 45 i) Prove the calculation of the basic earnings per share of $1.82 in fiscal 2021 (subject to small 46 rounding error). You will need to know the weighted average number of common shares 47 outstanding in the fiscal year which is also provided at 310,738,000. 49 49 Earnings Per Share = Net Income available for common shares Weighted Average Number of Common Shares 50 51 52 53 54 55 56 564348000 310738000 Earnings Per Share - 1.82 57 m) Explain WHY earnings per share (EPS) amounts are calculated. That is, what is the purpose in 58 showing EPS? If an investor owned 100,000 Dollarama common shares, what would she conclude from the EPS? The main purpose of calculating EPS is to know how much money a company makes for each share. It is also used for estimating the corporate value. 63 3) Higher EPS indicates higher value because the investors are ready to invest more because investors thought that the company might 65 earn higher profits in relation to their share price. 59 60 611) 622) 64 66 67 II) The statement of cash flows indicates that Dollarama paid a dividend of $54,770 in fiscal 2021 68 and $64,144 in fiscal 2020. What percentage of the net earnings for each of fiscal 2021 and fiscal 69 2020 was paid to investors as a dividend? 2020 2021 70 71 72 73 74 75 76 77 % of Net Earnings paid as dividend Dividend Net Earnings 54144 564348 54770 564039 % of Net Earnings paid as dividend 9.59% 9.71%