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The following year-end data were taken from recent balance sheets of Under Armour, Inc. (UA) (in millions):

Question:

The following year-end data were taken from recent balance sheets of Under Armour, Inc. (UA) (in millions):

December 31 Year 2 Year 1 $1,965.2 685.8 Current assets $1,498.8 478.8 Current liabilities


a. Compute the working capital and the current ratio as of December 31, Year 2 and Year 1. Round to one decimal place.
b. What conclusions concerning the company€™s ability to meet its short term obligations can you draw from part (a)?

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December 31 Year 2 Year 1 $1,965.2 685.8 Current assets $1,498.8 478.8 Current liabilities

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a Dec 31 Dec 31 Year 2 Year 1 Current assets 19652 14...View the full answer


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Related Video

The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.

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