Nike and Under Armour (Accounting Paper)
RUNNING HEAD: NIKE & UNDER ARMOUR FINANCIALS
Nike & Under Armour Financial Analysis
Table of Contents
Background……………………….……………………………………………………………………..3
Progress in last year…………………………………………………………………………………..3-5
Profitability/Debt Ratios…………………………...………………………………………………...5-7
Net Profit Margin………………………..……………………………………………………….5
Gross Profit Margin………………………...…………………………………………………….6
Return on Equity………………………….…………………………………………………...6-7
Earnings per Share……………………..………………………………………………………...7
Liquidity/Debt Ratios………………………………………………………….…….……………….7-9
Current Ratio……………………………………………………………………………………8
Debt to Equity…………………………………………………………………………………..8
Interest Coverage……………………………………………………………………………….9
Efficiency Ratios……………………………………………………………………..………………9-11
Inventory Turnover…………………………………………..……………………….………9-10
Payable Turnover…………………………………………..……………………………..…….10
Receivable Turnover……………………………………..……………………………….…….11
Trends………………………………………………………..……………………………………...11-14
Cash Flow Trends.………....……………………………………………………...…………….…14-15
Financial Analysis…………………………………………………………….……………………15-17
References……………………………………………………………………….……………….…….18
Background
Nike was incorporated in 1968 and has become arguably synonymous with elite footwear/apparel amongst the world population (Nike 10K, 2009). Nike’s primary business “is the design and development and worldwide marketing of high quality footwear and apparel” (2009, pg.1). In addition, Nike also designs/markets sports equipment and accessory products. Nike puts a heavy emphasis on investing in the innovation and design of their products to give their customers a high-quality product. Nike is the largest seller of athletic footwear and apparel in the world (2009). Nike sets the bar for other companies in the sports apparel/footwear industry, like Under Armour. Under Armour, a rather infant company was incorporated only fourteen years ago in 1996 (Under Armour
Nike & Under Armour Financial Analysis
Table of Contents
Background……………………….……………………………………………………………………..3
Progress in last year…………………………………………………………………………………..3-5
Profitability/Debt Ratios…………………………...………………………………………………...5-7
Net Profit Margin………………………..……………………………………………………….5
Gross Profit Margin………………………...…………………………………………………….6
Return on Equity………………………….…………………………………………………...6-7
Earnings per Share……………………..………………………………………………………...7
Liquidity/Debt Ratios………………………………………………………….…….……………….7-9
Current Ratio……………………………………………………………………………………8
Debt to Equity…………………………………………………………………………………..8
Interest Coverage……………………………………………………………………………….9
Efficiency Ratios……………………………………………………………………..………………9-11
Inventory Turnover…………………………………………..……………………….………9-10
Payable Turnover…………………………………………..……………………………..…….10
Receivable Turnover……………………………………..……………………………….…….11
Trends………………………………………………………..……………………………………...11-14
Cash Flow Trends.………....……………………………………………………...…………….…14-15
Financial Analysis…………………………………………………………….……………………15-17
References……………………………………………………………………….……………….…….18
Background
Nike was incorporated in 1968 and has become arguably synonymous with elite footwear/apparel amongst the world population (Nike 10K, 2009). Nike’s primary business “is the design and development and worldwide marketing of high quality footwear and apparel” (2009, pg.1). In addition, Nike also designs/markets sports equipment and accessory products. Nike puts a heavy emphasis on investing in the innovation and design of their products to give their customers a high-quality product. Nike is the largest seller of athletic footwear and apparel in the world (2009). Nike sets the bar for other companies in the sports apparel/footwear industry, like Under Armour. Under Armour, a rather infant company was incorporated only fourteen years ago in 1996 (Under Armour
References: Libby, P., Libby, R., Short, D. (2009). Financial Accounting (6th ed.). NewYork. McGraw-Hill Nike. (2009). SEC Form 10-K for the Year Ended May 31, 2009. Retrieved on June 1, 2010 from: http://media.corporate-ir.net/media_files/irol/10/100529/AnnualReport/nike-sh09-rev2/index.html Nike. Stevens, J (2010). Table 1. Financial Totals for 2008 & 2009/Calculated ratios. McHenry, Illinois. Under Armour. (2009). SEC Form10-K for the Year Ended December 31, 2009. Retrieved on June 1, 2010 from: http://www.uabiz.com/annual-proxy.cfm