Company situation Under Armour’s has experienced growth in all business segments from 2009 to 2012 due to an increase in distribution and product offerings such as Charged Cotton® & Storm Fleece® accounting for a 31.5% increase in apparel net revenue and a 42.9% increase in footwear net revenue. A 201.7% increase in accessories net revenue is due to Under Armour’s bringing hats and bags in house; this also accounts for the 7.1% loss in revenue from licensing accounting for an increase of over $85 million in net revenue. Between 2010 and 2012 Under Armour’s has experienced rising cost in cost of goods sold due to rising manufacturing and raw material costs. The company has been able to compensation these costs by reducing administrative expenses, increasing their net income percentages. Financial Analysis Profitability Ratio The profitability ratio is a way to measure a company's performance. Profitability is the capacity to make a profit. Under Armour’s has experienced an ROA growing from 9.06% in 2009 to 12.37% in 2012 with a slight drop to 11.87% in 2013. A similar repetition has occurred with the company’s ROE, rising from 2009 to 2012 with a slight drop to 17.36% in 2013. Under Armour’s has also experienced a slight drop in EBITDA in 2013 to 13.39%. Under Armour’s has accumulated large amounts of debt in 2013 as well as a large change in total …show more content…
Under Armour’s total debt to asset ratio raise from 26.68% in 2009 to 30.76% in 2011 with slight drop to 29.40% in 2012. Under Armour’s total debt to equity ratio grow from 3% in 2009 to 12% in 2011 with drop to 8% in 2012. Under Armour’s long term debt has experienced sharp growing from $10.95 million in 2009 to $52.76 million, which show the risk of having weak financial position. Under Armour’s interest coverage is ranked lower than 95% of the 669 competitive companies in the global