Compute the following five ratios for Nike, Inc. and Under Armour, Inc. for F/Y 2019. Show complete computations.

BRIEFLY explain what each ratio measures and how Nike and Under Armour compare in each case.

1. Interest Coverage Ratio (aka Times Interest Earned): EBIT/Interest Expense

2. Gross Profit Margin (aka Gross Profit Rate): Gross profit/Net sales

3. Net Profit Margin (aka Profit Margin): Net income/Net sales

4. Return on Equity: Net Income/Average total equity

5. Diluted Earnings per Share: Net Income/Weighted average number of common shares outstanding + new common shares that would have been issued at conversion

NIKE, INC. CONSOLIDATED STATEMENTS OF INCOME $ (In millions, except per share data) Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest expense (income), net Other (income) expense, net Income before income taxes Income tax expense NET INCOME Earnings per common share: Basic Diluted Weighted average common shares outstanding: Basic Diluted YEAR ENDED MAY 31, 2019 2018 39,117 $ 36,397 $ 21,643 20,441 17,474 15,956 3,753 3,577 8,949 7,934 12,702 11,511 49 54 (78) 66 4,801 4,325 772 2,392 4,029 $ 1,933 $ 2017 34,350 1 9,038 15,312 3,341 7,222 10,563 59 (196) 4,886 646 4,240 $ $ $ 2.55 $ 2.49 $ 1.19 $ 1.17 $ 2.56 2.51 1,579.7 1,618.4 1,623.8 1,659.1 1,657.8 1,692.0 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. NIKE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED MAY 31, 2019 2018 4,029 $ 1,933 $ 2017 4,240 $ (Dollars in millions) Net income Other comprehensive income (loss), net of tax: Change in net foreign currency translation adjustment Change in net gains (losses) on cash flow hedges Change in net gains (losses) on other Total other comprehensive income (loss), net of tax TOTAL COMPREHENSIVE INCOME (173) 503 (7) 323 4,352 $ (6) 76 34 104 2,037 $ 16 (515) (32) (531) 3,709 $ The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. NIKE, INC. CONSOLIDATED BALANCE SHEETS MAY 31, 2019 2018 4,466 $ 197 4,272 5,622 1,968 16,525 4,744 283 154 2,011 23,717 $ 4,249 996 3,498 5,261 1,130 15,134 4,454 285 154 2,509 22,536 $ $ (Dollars in millions) ASSETS Current assets: Cash and equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Identifiable intangible assets, net Goodwill Deferred income taxes and other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt Notes payable Accounts payable Accrued liabilities Income taxes payable Total current liabilities Long-term debt Deferred income taxes and other liabilities Commitments and contingencies (Note 18) Redeemable preferred stock Shareholders' equity Common stock at stated value: Class A convertible - 315 and 329 shares outstanding Class B - 1,253 and 1,272 shares outstanding Capital in excess of stated value Accumulated other comprehensive income (loss) Retained earnings Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 6 9 2,612 5,010 229 7,866 3,464 3,347 6 336 2,279 3,269 150 6,040 3,468 3,216 - 33 7,163 6,384 231 (92) 1,643 3,517 9,040 9,812 23,717 $ 22,536 $ The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement NIKE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS YEAR ENDED MAY 31, 2018 2019 2017 $ 4,029 $ 1,933 $ 4,240 705 34 325 15 233 7 47 647 218 27 (99) 706 (273) 215 10 (117) (270) (490) (203) 187 (255) 35 (426) (231) (120) 1,525 5,903 1,515 4,955 (158) 3,846 (Dollars in millions) Cash provided by operations: Net income Adjustments to reconcile net income to net cash provided by operations: Depreciation Deferred income taxes Stock-based compensation Amortization and other Net foreign currency adjustments Changes in certain working capital components and other assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in prepaid expenses and other current and non-current assets Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities Cash provided by operations Cash provided (used) by investing activities: Purchases of short-term investments Maturities of short-term investments Sales of short-term investments Additions to property, plant and equipment Disposals of property, plant and equipment Other investing activities Cash provided (used) by investing activities Cash used by financing activities: Net proceeds from long-term debt issuance Long-term debt payments, including current portion Increase (decrease) in notes payable Payments on capital lease and other financing obligations Proceeds from exercise of stock options and other stock issuances Repurchase of common stock Dividends - common and preferred Tax payments for net share settlement of equity awards Cash used by financing activities Effect of exchange rate changes on cash and equivalents NaticIRAS (CALTRASA) in Cash And a lan Cash and equivalents, beginning of year CASH AND EQUIVALENTS, END OF YEAR Supplemental disclosure of cash flow information: Cash paid during the year for: Interest, net of capitalized interest Income taxes Non-cash additions to property, plant and equipment Dividends declared and not paid (2,937) (4,783) (5,928) 1,7153,6133,623 2,072 2,496 2,423 (1,119) (1,028) (1,105) 5313 (25) (34) (264) 276 (1,008) - (6) (325) (27) 700 (4.286) (1,332) (17) (5,293) (129) 217 4,249 4,466 $ - (6) 13 (23) 733 (4,254) (1,243) (55) (4,835) 45 441 3,808 4,249 $ 1.482 (44) 327 (17) 489 (3,223) (1,133) (55) 7229) (2,148) (20) 1170 3,138 3,808 $ $ 153 $ 757 160 347 125 $ 529 294 320 98 7 03 266 300 The accompanying Notos to the Consolidated Financial Statements are an integral part of this statement. NIKE, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY COMMON STOCK CAPITAL IN ACCUMULATED EXCESS OTHER CLASS A CLASS B OF STATED COMPREHENSIVE RETAINED SHARES AMOUNT SHARES AMOUNT VALUE INCOME (LOSS) EARNINGS TOTAL 353 $ - 1,329 $ 3 $ 5,038 $ 318 $ 6,899 $12,258 17 525 525 (24) 24 (60) (189) (3,060) (3,249) (1,159) (1,159) 121 215 (531) (213) $ (13) 108 215 4,240 4,240 (531) 6,907 $12,407 600 (4,013) (4,267) 329 $ - 1,314 $ 3 $ 5,710 $ 24600 (70) (254) (1,265) (1,265) 110 In millions, except per share data) Balance at May 31, 2016 Stock options exercised Conversion to Class B Common Stock Repurchase of Class B Common Stock Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share) Issuance of shares to employees. net of shares withheld for employee taxes Stock-based compensation Net income Other comprehensive income (loss) Balance at May 31, 2017 Stock options exercised Repurchase of Class B Common Stock Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share) Issuance of shares to employees, net of shares withheld for employee taxes Stock-based compensation Net income Other comprehensive income (loss) Reclassifications to retained earnings in accordance with ASU 2018-02 (Note 1) Balance at May 31, 2018 Stack options Axarisad Conversion to Class B Common Stock Repurchase of Class B Common Stock Dividends on common stock ($0.86 per share) and preferred stock ($0.10 per share) Issuance of shares to employees, net of shares withheld for employee taxes Stock-based compensation Net income Other comprehensive income (loss) Adoption of ASU 2016-16 (Note 1) Adoption of ASC Topic 606 (Note 1) Balance at May 31, 2019 218 104 17 (92) $ (28) 82 218 1,933 1,933 104 (17) - 3,517 $ 9,812 539 329 $ - 1,272 $ 3 $ 6,384 $ 539 (14) 14 (54) (227) (4,056) (4,283) (1,360) (1,360) 142 325 323 (3) 139 325 4,029 4,029 323 (507) (507) 23 23 1,643 $ 9,040 315 $ - 1,253 $ 3 $ 7,163 $ 231 $ The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. Under Armour, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share amounts) Net revenues Cost of goods sold Gross profit Selling, general and administrative expenses Restructuring and impairment charges Income (loss) from operations Interest expense, net Other expense, net Income (loss) before income taxes Income tax expense (benefit) Income (loss) from equity method investment Net income (loss) Year Ended December 31, 2019 2018 2017 $ 5,267,132 $ 5,193,185 $ 4,989,244 2,796,599 2,852,714 2,737,830 2,470,533 2.340,471 2 ,251,414 2,233,763 2,182,339 2 ,099,522 183,149 124,049 236,770 (25,017) 27,843 (21,240) (33,568) (34,538) (5,688) (9,203) (3,614) 209,842 (67,788) (10,309) 70,024 (20,552) 37,951 (47,679) 934 $ 92,139 $ (46,302) $ (48.260) Basic net income (loss) per share of Class A, B and C common stock Diluted net income (loss) per share of Class A, B and C common stock $ $ 0.20 0.20 $ $ (0.10) $ (0.10) $ (0.11) (0.11) Weighted average common shares outstanding Class A, B and C common stock Basic Diluted 450,964 454,274 445,815 445,815 4 40,729 440,729 Under Armour, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) (In thousands) Year Ended December 31, 2019 2018 2017 92,139 $ (46,302) $ (48,260) 10,754 (18,535) 23,357 Net income (loss) $ Other comprehensive income (loss): Foreign currency translation adjustment Unrealized gain (loss) on cash flow hedge, net of tax benefit (expense) of $7,798, $(7,936), and $5,668 for the years ended December 31, 2019, 2018, and 2017, respectively. Loss on intra-entity foreign currency transactions Total other comprehensive income (loss) Comprehensive income (loss) $ (21,646) 22,800 (16,624) (886) (11,778) 80.361 $ (5,041) (776) (47.078) $ 7,199 13,932 (34.328) Under Armour, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except share data) December 31, December 31, $ 788,072 $ 557,403 708,714 652,546 892,258 1,019,496 313,165 364,183 2,702,209 2,593,628 792,148 826,868 591,931 550,178 546,494 36,345 41,793 82,379 112,420 88,341 123,819 $ 4.843.531 $ 4.245,022 $ $ 560,884 340,415 618,194 374,694 219,424 125,900 Assets Current assets Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property and equipment, net Operating lease right-of-use assets Goodwill Intangible assets, net Deferred income taxes Other long term assets Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued expenses Customer refund liabilities Operating lease liabilities Current maturities of long term debt Other current liabilities Total current liabilities Long term debt, net of current maturities Operating lease liabilities, non-current Other long term liabilities Total liabilities Commitments and contingencies (see Note 8) Stockholders' equity Class A Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of December 31, 2019 and 2018, 188,289,680 shares issued and outstanding as of December 31, 2019, and 187,710,319 shares issued and outstanding as of December 31, 2018. Class B Convertible Common Stock, $0.0003 1/3 par value: 34,450,000 shares authorized, issued and outstanding as of December 31, 2019 and 2018. Class C Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of December 31, 2019 and 2018, 229,027,730 shares issued and outstanding as of December 31, 2019, and 226,421,963 shares issued and outstanding as of December 31, 2018 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity Total liabilities and stockholders' equity 25,000 88,257 1,315,977 703,834 83,797 1,422,009 592,687 580,635 98,113 2,693,444 208,340 2,228,151 6262 S 11 11 973,717 1,226,986 (50,765) 2,150,087 $ 4,843.531 $ 916,628 1,139,082 (38,987) 2,016,871 4,245,022 Under Armour, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2019 2018 2017 $ 92,139 $ (46,302) $ (48,260) 186,425 (2.073) 39,000 254 4,640 49,618 181,768 14.023 9,893 254 4,256 41,783 173,747 (29,247) 71,378 254 2,313 39.932 (75) 55,910 108,757 38,132 (26.096) (38,544) (234,998) 186,834 109.919 (107,855) (79,106) (222,391) (52,106) Cash flows from operating activities Net income (loss) Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation and amortization Unrealized foreign currency exchange rate gain (loss) Impairment charges Amortization of bond premium Loss on disposal of property and equipment Stock-based compensation Excess tax benefit (loss) from stock-based compensation arrangements Deferred income taxes Changes in reserves and allowances Changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses and other assets Other non-current assets Accounts payable Accrued expenses and other liabilities Customer refund liability Income taxes payable and receivable Net cash provided by operating activities Cash flows from investing activities Purchases of property and equipment Sale of property and equipment Purchase of equity method investment Purchases of other assets Net cash (used in provided by investing activities Cash flows from financing activities Proceeds from long term debt and revolving credit facility Payments on long term debt and revolving credit facility Employee taxes paid for shares withheld for income taxes Proceeds from exercise of stock options and other stock issuances Other financing fees Payments of debt financing costs Net cash used in financing activities Effect of exchange rate changes on cash, cash equivalents and restricted cash Net increase in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash Beginning of period End of period (45.450) 149,519 24,334 19,966 59.458 (18,987) (80.710) 18,862 509,031 145,695 109,823 26,413 134,594 305,141 41,051 628,230 (39,164) 237,460 (145,802) (281,339) (170,385) 11,285 (39,207) (4,597) (202,904) (1,311) (147,113) (1.648) (282.987) 763,000 (665,000) (2.781) 11,540 25,000 (162,817) (4.235) 7.472 63 (2.553) (137,070) 5,100 229.948 505,000 (695,000) (2,743) 2,580 306 (11) (189,868) 12.467 247,925 106,759 4,178 65,410 566,060 796,008 318,135 252,725 566,060 $ 318,135 $ $ $ (8,084) $ (14,611) $ 10,580 Non-cash investing and financing activities Change in accrual for property and equipment Other supplemental information Cash paid (received) for income taxes, net of refunds Cash paid for interest, net of capitalized interest 23,352 18,031 (16,738) 28,586 36,921 29,750 Under Armour, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (In thousands) Class A Common Stock Class B Convertible Common Stock Class C Common Stock Additional Paid-in- Capital Retained Earnings Accumulated Other Comprehensive income Total Equity Shares 183.815 Amount Shares 6 134,450 - - Amount 11 - Shares 220.174 556 Amount 7 3 - 1.259,414 823,484 3,664 (52,143) $2,030,900 3,664 609 Balance as of December 31, 2016 Exercise of stock options Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements Issuance of Class A Common Stock, net of forfeitures Issuance of Class C Common Stock, net of forfeitures (85) 898 - - - - - - - - - - - - - - - - - - (78) - 1,723 - - - - 1 - - - - 7,852 2,686) 39,932 (2,781) - - (23,932) - - - - - - (2,781) - 7,853 (26,598) 39,932 Impact of adoption of accounting standard updates Stock-based compensation expense Comprehensive income (loss) Balance as of December 31, 2017 185,257 $ $ $ $ 61 1 34,450 - 11 - 222,375 2,127 74 - 872,266 6,747 (48,260) $ 1.184.441 $ - 13,932 (34,328) (38.211) $ 2018,642 - 6,748 Exercise of stock options and warrants 2,084 (23) - - - (140) - - (2,584) - (2,584) Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements Issuance of Class A Common Stock, net of forfeitures - - - - (4,167) Issuance of Class c Common Stock, net of forfeitures Impact of adoption of accounting standard updates 392 - - - -_ 187.7105 3.507 Stock-based compensation expense - - - - - - - - -_ -_ 6 2 34,450 $ - - - - - 2,080 - - - - -_ - 11 226.422 - 293 - - (4,162) - - 3,507 41,783 -_(45,302) 916,628 $ 1.139,082S 2,101 41.783 - - - 75 - (776) (47,078) $ Comprehensive loss Balance as of December 31, 2018 Exercise of stock options Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements $ (38,987) S 2,016,871 2,101 Issuance of Class A Common (15) 154 - - - - - - - - - - (227) - 2.540 - - 1 - - 5,370 (4.235) - - - - - (4,235) - 5,371 Issuance of Class c Common Stock, net of forfeitures Stock-based compensation expense 49,618 _1358 82.190. 49,618 80,361 92,139 (11.778) Comprehensive income (loss) Balance as of December 31, 2019 188.290 $ 62 34,450 $ 11 229,028 $ 76 $ 973,717 $ 1,226,986 $ (50,765) $ 2,150,087