25 Jul Under Armour Financial Analysis Discussion
1st Post: Based on the financial analysis you did earlier, what did your analysis reveal?
2nd Posts: Respond to at least 2 other students’ posts and discuss what advice you would give to Under Armour to address their growth issues.
Peers:
peer 1 In my financial analysis, I found that the company is able to pay off any liabilties using the current assets, minus inventory, where the company had the highest quick ratio in 2009. Interestingly, the ratios for the industry were much lower than Under Armour’s values. Based on this data, it appears that Under Armour was able to outperform the industry average despite the 2008 recession. In the case study, it revealed that the company’s footwear segment declined in 2009 and continued to decline. However, its apparel and accessories categories saw a significant increase. This could be due to the competition with Nike and Adidas who dominate the footwear market. It could also appear that Under Armour should focus on apparel and accessories which could increase the company’s overall net income.peer 2 After comparing Under Armour to the industry, I found that UAA overall did better for their current ratios compared to the industry. A good number to be in is 1.5-3 for current ratio. For the return on equity, from 2019-220, UAA underperformed tremendously compared to the industry, but in 2021, UAA excelled and did very well. A good percentage to be at is 15-20$. For fixed asset turnover, UAA did amazing compared to the industry. A solid number to be at is 2.5 + and UAA either doubled or almost doubled compared to the industry for 2019 and 2021.Finally, I compared long-term debt to capital and found that the industry average was well below the percentage that is considered good, but UAA was only short in 2019 at 34% and 2021 at 38%, but oddly enough during 2020 they had a solid percentage of 50. An ideal number to aim for is 40-60% It was quite shocking how well Under Armour did during Covid compared to the rest of the industry. Part of me believes that because people were stuck at home, a lot of demand for workout apparel and accessories shot up and Under Armour was already a leader in this industry it helped them tremendously.
