nder Armour inc arnings Management Red Flags For the Year Ended December 31 2009 2010 2011 nalysis of inventory, Cost of Goods Sold and Accounts Payable 2012 2013 2014 2015 2016 2017 2018 2019 2020 evenue 856.4 1,063.9 1,472.7 1,834.9 2,332.1 3,084.4 1963.3 4813 4,989.2 5.193.2 5,267 AATA Cost of Goods Sold (COGS) 443.4 533.4 759.8 Selling, General & Admin Exp. (SG&A) 327.8 418.2 550.1 Total Expenses 809.6 995.4 1,375.8 1,706.1 955.6 1,195.4 670.6 871.6 2,169.8 1,572.2 2,057. 2,584.7 2.737 2,152,7 2.796,6 2.3140 1,158.3 1,497.0 1,8311 2,099.5 27338 2,3719 2,876A 3,730.7 4,5763 5.0374 5239A 5.175.0 50339 COGS/Revenue 51.8% 50.1% 51.6% 52.1% 51.3% 51.0% 51.9% 53.5% 54.9% SLON SEIN SEN Inventory 1485 215.3 324.4 319.3 4690 536.7 783.0 917.5 1,1585 10195 892. 2160 Inventory/COGS 33.5% 40.4% 42.7% 33.4% 39.2% 34.1% 38.1% 35.5% 42.3% 25.75 31 38.7% Accounts Payable 63.7 84.7 100.5 143.7 165.5 210.4 200.5 4097 5611 560.9 6182 STED A/P/Total Expenses 8.5% 8.5% 7.3% 8.4% 7.6% 7.3% 54% 90% ILIN 10 N 1198 1235 Analysis of Prepaid and Accrual Accounts Cost of Goods Sold (COGS) 443.4 533.4 755.8 955.6 1,195.4 Selling, General & Admin. Exp. (SG&A) 327.8 418.2 550.1 670.6 Total Expenses 809.6 995.4 1,375.8 1,706.1 871.6 2,169.8 1,572.2 2,057.8 1,158.3 2,876.4 4.5763 5,037.4 2.584.7 2,737.8 2,852.7 2,796.6 2,314.6 1,497.0 1,831.1 2,099.5 2,182.3 2,233.8 21719 3,730.7 52394 5.175.0 5,0239 Prepaid Expenses and Other 20.0 19.3 39.6 43.9 64.0 87.2 152.2 174.5 257.0 364.2 313.2 2823 Prepaid and Other/ Total Expenses 2.5% 1.9% 2.9% 26% 2.9% 3.0% 4.1% 1% 5.1% 70% 6.1% 5.6% Accrued Expenses 40.9 55.1 60.3 15.1 133.7 147.7 192.9 208.7 296.9 340.4 3747 3759 Accrued Expenses/Total Expemes 5.1% 5.5% 5.0% 5.0% 6.2% 5.1% 5.2% 4.6% 5.9% 63% 7.2% 75% c. Analyze inventory, cost of goods sold and accounts payable by looking at the relationship between the balance sheet account and related expenses. The relationship should be stable over time. In addition, if the company made a large inventory purchase right at year end, you would expect accounts payable to increase also. d. Analyze prepaid and accrual accounts by looking at the relationship between these accounts and total expenses. The relationship should be stable over time