Required Part II - Module Six: The purpose of the second part of the comprehensive project is to compute financial statement ratios for Under Armour, Inc.

A. Based on formulas given in Appendix B, compute the following ratios in Excel for two years.

1. Debt ratio

2. Gross profit margin

3. Free cash flow

4. Times interest earned

5. Accounts receivable turnover

6. Inventory turnover

B. Develop a DuPont Analysis of ROE for two years, including computations of

1. Return on Sales

2. Asset Turnover

3. Return on Assets

4. Financial Leverage

5. Return on Equity

C. Briefly evaluate the ratio trends. Indicate on your worksheet whether each ratio is:

1. stronger / weaker

2. quicker /slower

3. more / less liquid

4. more / less risk

D. Submit a report. Develop a 2-4 pg report evaluating trends in all of the above ratios. Discuss whether your company's profitability, efficiency, liquidity, and solvency are improving or deteriorating.

Format: APA

Introduction This report pertains to Under Armour, Inc. regarding primary business activities, brief history of company, competitors, and company's position in industry. This report also deals with recent developments within company's industry, key risk factors, strategic directions of company and other significant items for Under Armour. Brief history of Company The company was incorporated as Maryland Corporation in 1996 in state of Maryland having its registered office at 1020, Hull Street, 3rd Floor, Baltimore, MD 21230. Under Armour belongs to apparel and accessories industries. Description of Business and primary business activities Company's principal business activities are development, marketing and distribution of branded performance apparel, footwear, accessories for men, women and youth. Company's products are apparel, footwear, accessories for men, women and youth. The compzny's performance apparel and footwear are engineered in many designs and styles to wear in almost every climate to provide a performance alternative to traditional products. Under Armour's products are sold worldwide and are worn by athletes at all levels, from youth to professional, on playing fields around the globe, as well as by consumers with active lifestyles. Company operates in USA, some part of Europe, China, Countries of Latin America, Australia, Newzealand, Taiwan and Hongkong. Major Competitors Under Armour is operating in strict competition environment and main competitors of company are Nike and Adidas. Company's position within industry Until September 2016, Under Armour was number 2 in industry but in October 2016, Adidas recaptured position two in industry and Under Armour was pushed to no. 3 position (\"Adidas Is Once Again No.2 in America\" by John Kell, Fortune Oct.25, 2016). Recent developments Under Armour's product development team works closely with company's sports marketing and sales teams as well as professional and collegiate athletes to identify product trends and determine market needs. These teams worked closely to identify the opportunity and market for company's ColdGear Infrared product, which is a ceramic print technology on the inside of company's garments that provides athletes with lightweight warmth. Speedform , a proprietary 3-dimensional molding technology for footwear which delivers superior fit and feel. In 2016, was introduced by company in UA CoolSwitch, a fabric treatment with sweat-activated cooling technology and Threadborne, a soft micro-engineered fabric that provides lightweight directional strength and support at the yarn level. Key Risk Factors If there is a downturn in the economy, consumer purchases of discretionary items will be affected, which could materially harm company's sales, profitability and financial condition. Under Armour derives a substantial portion of its sales from large wholesale customers. If the financial condition of company's customers declines, company's financial condition and results of operations could be adversely affected. If company is unable to anticipate consumer preferences and successfully develop and introduce new, innovative and updated products, its net revenues and profitability may be negatively impacted. Under Armour rely on third-party suppliers and manufacturers to provide fabrics for and to produce its products, and company has limited control over these suppliers and manufacturers and may not be able to obtain quality products on a timely basis or in sufficient quantity. Company's credit facility contains financial covenants and other restrictions on its actions, and it could therefore limit company's operational flexibility or otherwise adversely affect company's financial condition. Sponsorships and designations as an official supplier may become more expensive and this could impact the value of company's brand image. Under Armour is in the process of implementing a new operating and information system, which involves risks and uncertainties that could adversely affect its business. A number of company's fabrics and manufacturing technology are not patented and can be imitated by company's competitors. Under Armour is subject to periodic claims and litigation that could result in unexpected expenses and could ultimately be resolved against company. Strategic Directions Under Armour's Connected Fitness strategy is focused on connecting with its consumers and increasing awareness and sales of company's existing product offerings through company's global wholesale and direct to consumer channels. Under Armour plans to engage and grow this community by developing innovative applications, services and other digital solutions to impact how athletes and fitness-minded individuals train, perform and live. Conclusion Under Armour is operating in strict competition with well established and financially strong companies like Nike and Adidas but despite of it company has performed well in recent past. Company is also careful towards new technological changes in industry and implementing these. Future of company is bright. References: 1. http://files.shareholder.com/downloads/UARM/4900230812x0xS1336917-1717/1336917/filing.pdf 2. http://fortune.com/2016/10/25/adidas-under-armour-nike/