Retrieve the 2016 Under Armour financial statements at www.sec.gov by clicking on Filings and then searching for “Under Armour” under Company Filings. When you see the list of filings for the company, select the Form 10-K for 2016. Be sure to retrieve the 2016 financial statements, not another year. These financial statements report a number of liabilities.

Requirements

1. Refer to Note 5—Credit Facility and Other Long Term Debt. What is Under Armour’s weighted average interest rate on outstanding borrowings for 2016? How much in long-term debt obligations does Under Armour currently owe for 2017?

2. Refer to the note entitled “Commitments and Contingencies.” Describe its contents. Are any of these items included in the liabilities recorded in either the current or long-term section of the balance sheet? Why or why not?

3. Refer to Note 6—Commitments and Contingencies, under Obligations Under Operating Leases. Describe the company’s commitments under its operating lease arrangements. Calculate the impact the operating leases would have had on Under Armour’s ROA and debt ratios at the end of 2016 if the leases had been capitalized.

4. For 2016, compute the company’s debt ratio, leverage ratio, and times-interest-earned ratio. Would you evaluate Under Armour as risky, safe, or average in terms of these ratios?

5. Access Under Armour’s, most recent financial statements from www.sec.gov. What has happened to Under Armour’s, debt position since the end of 2016? (Challenge)