Response, Do you agree or disagree and why?

"Capturing growth opportunities: Our flexible real estate model is a strategic foundation for our continued growth. It positions us well to invest in new store growth, enter new markets, deliver new formats and reinvest in our mature store base. In 2018, we expect to open 900 new stores, remodel 1,000 of our mature store locations and relocate approximately 100 stores" (Dollar General, n.d.).

During the 2018 and 2019 fiscal years, Dollar General is planning to open:

2018 - 15,370 total stores 2019 - 16,278 total stores - an increase of 908 total stores and a 6% increase in overall company size 2020 - 17,266 total stores - an increase of 988 total stores and a 6% increase in overall company size

According to the Consolidated Statement of Cash Flows Data on page 49 of the 2017 Form 10-K, Dollar General invested:

2016 - 504,806 thousand 2017 - 560,296 thousand 2018 - 646,456 thousand

I do not think the amount spent on investing activities represents the full cost that Dollar General incurred to open new stores. According to the consolidated statement of cash flows section of Supplemental Schedule of Noncash Investing and Financing

Activities: Purchases of property and equipment awaiting process for payment, included in Account payable are:

2016 - 32,020 thousand 2017 - 38,914 thousand 2018 - 63,178 thousand

If I'm reading this correctly, I believe there is still a balance for Property on the statement of cash flows. Also, according to the 10-K form, many of these buildings are long-term leases that Dollar General does not own and I do not understand the impact of this. Finally, Dollar General has the cash to make these investments from operating activities and borrowings under revolving credit facilities.

References:

Dollar General. (n.d.). Investor relations. Retrieved from http://investor.shareholder.com/dollar/financials.cfm(Links to an external site.)

Statista (2022). Number of Stores of Dollar General in the United States from 2007 to 2020

https://www.statista.com/statistics/253587/number-of-stores-of-dollar-general-in-the-united-states/