Question

40 PARTI Pinance Basics are list listed EXHIBIT 2.2 Under Armour balance sheet. v REL A December 31. Under Armour, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share data) December 31 2014 2013 MEA the equi Not of 2 F DE RIS $ 593,175 $347.489 279.835 536,714 87.177 52,498 1,549,399 305,564 123,256 26,230 33,570 57,064 $2,095,083 $1,577,741 209.952 469.006 63,987 38,377 1,128,811 223,952 122,244 24,097 31,094 47,543 the ca FU te to t Assets A 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 Goodwill 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 Other current liabilities @ Total current liabilities Long term debt, net of current maturities Other long term liabilities H Total liabilities 0 Commitments and contingencies (see Note 7) $ 210,432 147,681 28,951 34,563 421,627 255,250 67,906 744.783 $ 100,000 165,456 133,729 4,972 22,473 426.630 47.951 49,806 524,387 59 57 Stockholders' equity Class A Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of December 31, 2014 and 2013; 177,295,988 shares issued and outstanding as of December 31, 2014 and 171,628,708 shares issued and outstanding as of December 31, 2013. Class B Convertible Common Stock, $0.0003 1/3 par value; 36,600,000 shares authorized, issued and outstanding as of December 31, 2014 and 40,000,000 shares authorized, issued and outstanding as of December 31, 2013. Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) M Total stockholders' equity Total liabilities and stockholders' equity 12 13 508,350 397,248 856,687 653,842 (14,808) 1,350,300 $2,095,083 $1,577,741 2,194 1,053,354 Source: Under Armour (2014). Access the full report, cited in References, for Notes and other background information
Need answers to the case questions 1, 2, 3, and 4.

Answer 1

1. T-ACCOUNT

• A T-Account is a visual presentation of the financial transaction and looks like a T where is the left side is always debit side and the right side is the credit side. It is more of an informal way to throw in the journal entry to respective T-Account.
• Usage in double entry- DOuble entry means each transaction has a dual effect, one on the credit side and the other on the debit side. While making T-Accounts, as mentioned earlier, debits are recorded on the left side and credits are recorded on the right side of the T-Account. Debits increase the balance of assets and expenses while credits increase the balance of liabilities and incomes.

2. Components of Balance Sheet

• The three major components of balance sheet are Assets, Liabilities and equity. Assets must equal the total of liabilties and equity.
• Line items found in assets are- Inventory, Investments, Fixed assets etc
• Line items found in liabilities are- Accounts Payable, Notes payable etc
• Line items found in equity section are- Common stock, retained earnings, non controlling interest etc

3.Difference between income statement and statement of cash flows

• A cash flow statement depicts the amount of cash inflows and outflows over a period of time. The income statement is the one of the financial statements and shows a company's revenues and total expenses, including noncash transactions, such as depreciation and profit/loss on sale of assets.

4. Purpose of calculating financial ratios

• Ratios involve a calculating a relationship between two components of financial statements. Financial ratios enable the management and users to know about a company's performace and how well a company is performing in comparison to its competitiors.
• Financial ratios give a great insight to what needs to be focussed on