According to the National Sporting Goods Association (2013), sporting goods in the United States is a nearly $60 billion industry. Sports apparel and athletic footwear are two of the largest categories of this industry. Under Armour is a fast-growing competitor in the sports apparel and athletic footwear categories, in which Nike has long been recognized as the leader. Use the financial ratios for Nike that you computed in the Practice Problem and the financial ratios for Under Armour provided throughout this chapter to compare the financial health of Nike and Under Armour. Answer the following questions.

Case questions

1. In what ratio areas is Nike stronger than Under Armour?

2. In what ratio areas is Under Armour stronger than Nike?

3. If you were an investor considering purchasing stock in either Nike or Under Armour, which company would you choose? Explain and support your answer.

4. If you were a bank manager or other investor considering a request to loan money to either Nike or Under Armour, to which company would you choose to provide a loan? Explain and support your answer.