ACCT 503 Week 8 Final Completed Course Project; Signature Assignment A Financial Statement Analysis

Complete one paragraph, profiling each company's business, including information such as brief histories, where each company is located, number of employees, the products each company sells, and so forth. Please reference any websites that you used for the profiles on the Bibliography tab. NIKE, Inc. designs, develops, markets, and sells athletic apparel, footwear, equipment, and accessories. NIKE's headquarters are in Beaverton, Oregon. They were founded in 1964 as Blue Ribbon Sports, Inc. but, in 1971, they changed their name to NIKE, Inc. According to Yahoo! Finance, NIKE has 76,700 full-time employees. NIKE is known for their celebrity endorsements including basketball icon, Michael Jordan. NIKE had 2014 net product sales of $27.8 billion. Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories. Under Armour was founded in 1996 and is headquartered in Baltimore, Maryland. According to Yahoo! Finance, Under Armour has 7,000 full-time employees. Under Armour was founded by Kevin Plank, a former University of Maryland college football player. Under Armour had net product sales of $3.1 billion for 2014. You all get the chance to play the role of financial analyst below. The summary should be a comparison of each company's performance for each major category of ratios listed below. Focus on major differences as you compare each company's performance. A nice way to conclude is to state which company you feel is the better investment and why. Liquidity: NIKE has the advantage for the current ratio. NIKE has $3.05 in current assets for every dollar in current liabilities while Under Armour has only 98 cents in current assets for every dollar in current liabilities. NIKE has the advantage for the inventory turnover ratio, but Under Armour has the advantage for the accounts receivable turnover ratio. NIKE turns over its inventory 4.1 times to Under Armour's 3.1 times. Under Armour has the advantage for the accounts receivable turnover ratio as Under Armour collects on its receivables 12.6 times to Nike's 8.5 times. Solvency: Under Armour has less debt than NIKE as evidenced by Under Armour's 35.5% debt-to-assets ratio as compared to NIKE's 41.8% debt-to-assets ratio. NIKE can cover its interest expense 108.4 times with income before interest and taxes, while Under Armour can only cover its interest expense 65.1 times with their income before interest and taxes. NIKE has free cash flow of $1.3 billion while Under Armour has $78.5 million in free cash flow. Profitability: Under Armour has the advantage for the gross profit rate at 49% while NIKE has a 44.8% gross profit rate percentage. NIKE has the advantage for the profit margin ratio at 9.7% versus 6.7% for Under Armour. Under Armour has the advantage for asset turnover as they turn their assets 1.68 times to Nike's 1.54 times. NIKE has the advantage for both return on assets (ROA) and return on common stockholder's equity (ROE). NIKE has an ROA of 14.9% to Under Armour's 11.3%. NIKE also has the advantage for return on common stockholders' equity with an ROE of 24.6% to Under