Question

Perform a financial analysis for Under Armor using the financial statements below. Using 3 years of data, compare the data to the industry average in order to determine how the company is doing. Please include the following ratios: Gross profit margin, ROI, ROE, EPS, Inventory turnover, days of inventory, debt to asset ratio, debt to equity ratio, times interest earned

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December 31, 2009 December 31, 2006 December 31, 2007 $187.297 79356 148.888 19,989 12,870 448.000 72,926 5.681 13,908 5,073 $ 545588 102,042 81.302 182,232 18.023 12,824 396,423 73,548 5,470 8,687 3.427 487.555 40588 93.515 166,082 11.642 10,418 322,245 52,332 6,470 8173 1.303 390,613 S- 68,710 40.885 9.178 55,012 36,111 4,111 Assets Current assets Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other current assets Deferred income taxes Total current assets Property and equipment, net Intangible assets, net Deferred income taxes Other long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Revolving credit facility Accounts payable Accrued expenses Current maturities of long-term debt Current maturities of capital lease obligations Other current liabilities Total current liabilities Long-term debt, net of current maturities Capital lease obligations, net of current maturities Other long-term liabilities Total liabilities Stockholders' equity Class A Common Stock, 5.0003 1/3 par value; 100,000,000 shares authorized as of December 31, 2009 and 2008; 37,747,647 shares issued and outstanding as of December 31, 2009 and 36,808,750 shares issued and outstanding as of December 31, 2008 Class B Convertible Common Stock, S.0003 1/3 par value: 12.500,000 shares authorized, issued and out- standing as of December 31, 2009 and 2008 Additional paid-in capital Retained earnings Uncarned compensation Accumulated other comprehensive income Total stockholders' equity Total liabilities and stockholders' equity 25,000 72.435 25,905 7,072 361 2.337 133.110 13,061 $65 1.292 120,162 10.948 95,609 9.208 14.481 $ 145,591 10.10 156,458 121 12 197342 202.188 174725 156,011 (60) 162,362 1177 (182) (14) 864 331.097 2845 399.997 5545 588

Answer 1

Subject: Gross profit Margin = Gross profit / Net sales Date 2009 = 413025 856,411 23:418 = 48% 2008 354948 -0.48 = 484. 725244 2007 = 305044 0.57 = 57%. 60656 22 22229_222.22.22229900000 ROI (Return on Investment) = Net Income / cast of Investment 200g =46785/19880 : 2.35 2008 = 38229/42066 20.91 2007 = 52558/38084 21:38 ROE (Return on Equity) = Net Income / Total equity 2009 546785 /399 997 20.12 2008 = 38 229 / 331097 - 0112 2007 = 52558/280 485 -0.19

TΛΤΑ Subject: Date Invoritory turnover COGS / Average Inventory 200g = 443386/ 148888 = 2198 2008 - 370296 / 182.232 - 2003 2007 2301517/166082 a 1181 Days of Inventory = 365/ Inventory turnover 2009 = 365 2.98 122.48. 2008 = 365/2.03 = 179.8 2007 = 365/1.81 2201165 Debt to asset Ratio = Total debt / Total Assets 2009 = 145591/545588 = 0.27 2008 = 156458487555 20:32 -0.28 2007 = 110128 / 390613 Debt to Equity Ratio = Total liabilities/ Total Equity 2009 - 145591/399997 > 0.36 2008 156458/ 331097 - 0:47 2007 - 1101281 280485 - 0.39

High Gross profit margin means good company"s condition.

Higher ROI is preferred.

Higher ROE ,the more efficient a company"s management is at generating income and growth from its equity financing.

Higher inventory turnover ratios are considered positive indicator of effective inventory.

Days of inventory shows how quickly a company can turn inventory into cash.

Lesser debt to assets ratio means company have more assets than liabilities.

Lower debt to equity ratio is preferred because their interest are better protected in the event of a business decline.