Read this news article. Pick three choices from the following 15 questions to post your initial posting. Each of your posting should be limited within 250 words.

Article: Companies in recent years have been less likely to receive a Wells notice from the Securities and Exchange Commission warning them of potential charges, but when they get one, it is serious.

Once youve received a Wells notice, thats effectively the declaration of war, said Jim Peterson, a corporate-securities attorney and a former partner at accounting firm Arthur Andersen LLP. Enforcement is locked and loaded, ready to go.

Under Armour is the latest company to receive an alert notifying them that the Securities and Exchange Commission might sue them for alleged violations of securities law. The Baltimore-based athletic-apparel company could face civil charge related to its closures in 2015 and 2016 around shifting sales between fiscal quarters.

The SEC issues a so-called Wells notice when it believes it can establish a violation and is prepared to recommend the commission file a civil lawsuit. The SEC sent a notice to the Bank of New York Mellon Corp. in 2014 over alleged violations of U.S. foreign-bribery laws by its employees. The bank in 2015 paid $14.8 million to settle the allegations.

Companies served with a Wells notice can present a written defense in response. The evidence presented in the note could lead the SEC to close Wells notice-based investigations without acting.

In most cases, the SEC later files a complaint as part of a negotiated resolution with the defendant, said Joseph Grundfest, a Stanford Law School professor and a former SEC commissioner.

In this instance, Under Armour has to either convince the enforcement division to change their mind or persuade the SEC to overrule the position of enforcement, Mr. Peterson said. You respond to the Wells notice, knowing that the chances are against you in changing their minds.

A spokesman for Under Armour declined to comment. The company previously has said it was confident its revenue-recognition practices and investor disclosures didnt violate laws.

A Wells notice is more serious than a comment letter, in which the regulator inquiries about a public companys disclosures or accounting practices. The SEC decides whether to proceed with an enforcement action usually within 180 days of issuing the notice. The noticesnamed after lawyer John Wells, who led an SEC advisory panel on enforcement procedures in the early 1970shave become less common since the financial crisis.

Companies told they are under a formal investigation may submit a white paper or other materials that make their case to the regulator, Mr. Grundfest said. These white papers provide companies a chance for the company to defend itself and pre-empt being served with a Wells notice.

Under Armour has said it began responding in 2017 to requests from the SEC and the Justice Department for documents and information, and a Wells notice was served on July 22. It couldnt be determined if the company responded with a white paper before last weeks SEC action.

Auditors sometimes also receive a Wells notice, which could signal the focus of the investigation. The companys auditor, PricewaterhouseCoopers, hasnt received a Wells notice, a person familiar with the matter said. PwC has served as Under Armours auditor since 2003, records show.

PwC may not have received the notice for a number of reasons, including if the SEC staff believes the company lied to the auditors, or the SEC is ready to settle, securities lawyers said.

Questions: Pick 3 out of the 15

1. What did Under Armour do wrong according to the SEC?
2. Why was it wrong?
3. Look at stock price trend of Under Armour around the probe (July 27, 2020). Expand the time window to one month, one year, and five years. What did you notice in the chart? How did investors view Wells Notice?
4. Look into Under Armours 10-k. How does Under Armour sell its products? What does the Wells Notice mean by pulling forward sales?
5. Refer to FASB Codification. When can you recognize revenue?
6. What do investment analysts say about Under Armour? Attach it on your posting or paste the link of analysts comments online in your posting.
7. Download the Under Armours 10-Q of 2014 to 2017 from Edgar. Draw a line/bar chart to illustrate the trend of net revenue. What pattern of the revenue do you observe? What is the trend of growth rate? Note that investors assess growth rate by comparing current quarter with the same quarter last year.
8. Perform DuPont analysis by calculating ROE, profit margin, asset turnover, and equity multiplier for Under Armour from 2016 (10-K ended 2017-02-23) to 2019 (10-K filed 2020-02-26). Please attach your Excel spreadsheet so we can verify your calculation. What is the trend of Under Armours ROE? What is the cause of such trend? Reminder: ROE and Asset Turnover should use average equity and average asset between this year and last year.
9. Assess Under Armours risk by following ratios: Current ratio, quick ratio, debt-to-equity ratio, time-interest earned ratio (interest coverage), and ROE from 10-K of 2015-2019. Please attach your Excel spreadsheet so we can verify your calculation. What is the trend of Under Armours liquidity over the past 5 years? What is the trend of Under Armours solvency over the past 5 years? How does Under Armours debt financing affect its profitability?
10. Perform DuPont analysis by calculating ROE, profit margin, asset turnover, and equity multiplier of Nike (Ticker Symbol: NKE) from 2016 to 2019. Please attach your Excel spreadsheet for us to verify your calculation. How does Nike compare to Under Armour?
11. Calculate current ratio, quick ratio, debt-to-equity ratio, time interest earned ratio, and ROE for Nike (Ticker Symbol: NKE) from 2015 to 2019. Please attach your Excel spreadsheet for us to verify your calculation. How does Nike compare to Under Armour?
12. Perform DuPont analysis by calculating ROE, profit margin, asset turnover, and equity multiplier of Lululemon (Ticker Symbol: LULU) from 2016 to 2019. Please attach your Excel spreadsheet for us to verify your calculation. How does Lululemon compare to Under Armour?
13. Calculate current ratio, quick ratio, debt-to-equity ratio, time interest earned ratio, and ROE for Abercrombie & Fitch (Ticker Symbol: ANF) from 2015 to 2019. Please attach your Excel spreadsheet for us to verify your calculation. How does Lululemon compare to Under Armour?
14. Perform DuPont analysis by calculating ROE, profit margin, asset turnover, and equity multiplier of L Abercrombie & Fitch (Ticker Symbol: ANF) from 2016 to 2019. Please attach your Excel spreadsheet for us to verify your calculation. How does Abercrombie & Fitch compare to Under Armour?
15. Calculate current ratio, quick ratio, debt-to-equity ratio, time interest earned ratio, and ROE for Abercrombie & Fitch (Ticker Symbol: ANF) from 2015 to 2019. Please attach your Excel spreadsheet for us to verify your calculation. How does Abercrombie & Fitch compare to Under Armour?