NIKE vs. Under Armour 2018

  1. Compute- the following financial ratios for both companies and provide as an appendix to the required paper. If you need help understanding the meaning of the ratios or how to they are computed, go to: http://www.investopedia.com/university/ratiost Liquidity measurement ratio: Current ratio Profitability indicator ratios:- Return on assets Return on equity Debt ratio: Debt ratio Operating performance ratio: Fixed asset turnover ratio Cash flow indicator ratio: Dividend payout ratio Investment valuation ratio. Price / Earnings ratio For each company and comparing the two, you are to write a eight to ten (8-10) page report that answers the following: 1. Provide a short background on each company, the industry and the market (growing, declining, etc?) in which they operate. (This should be no more than 1- 1.5 pages for both companies in total and can be a part of your introduction.) 2. Using the current ratio and debt ratios, discuss what conclusions you can make about each company’s ability to pay current liabilities (debt). Support your conclusions. Which company is doing better, why or why not? 3. Using the profitability and operating performance ratios, discuss what conclusions you can make about each company’s profits over the past three years. Support your conclusions. Which company is doing better, why or why not? 4. Using the cash flow indicator and investment valuation ratios, discuss which company is more likely to have satisfied stockholders. Support your conclusions. Which company is doing better, why or why not? 5. As an investor, discuss which company you would choose to invest in and provide a rationale for your decision. Support your conclusions, why or why not? 6. After concluding your research about each company and reviewing their annual report, Discuss what non-financial criteria you would consider when choosing between these two investment options? Support your conclusions, why or why not?

Sample Solution

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