Under Armour, Inc.Joshua O'RourkeMBA-520Financial Health and Performance Analysis
Executive SummaryObjectiveThe goal of this document is to review and asses the past and current financial performance and health of Under Armour, Inc. By way of reviewing the company’s financial documents, and by comparison to the market and to their direct competition to see whether Under Armour is indeed a healthy company.SummaryAt first glance, Under Armour appears to be a company in direr circumstances. The company lost over $45 million in 2017 and is in the midst of continuing that trend into 2018. Expenditures for Under Armour have increased from 2016 to 2017, which has proven to be the reason for Under Armour’s loss as revenue for the company has also grown over this time. UnderArmour has taken the objective to become a global brand instead of a domestic brand, opening itself up to a larger consumer base. Projections of Under Armour show a growth to its revenue, which is promising if the company can find a way to lower its expenditures, then they will see the loss from 2017 return to a profit sooner than expected.ResultsWhile Under Armour may appear to be in a bad place financially, the company is in fact in healthy condition. With many of its profitability and solvency ratios being close to the industryaverage, it is difficult to argue the company is in a bad place. With enough capital to pay off all its current debts and taking a stance to not take on creditors, Under Armour is financially healthy despite its losses. 1
ContextKey GoodsUnder Armour provides a variety of products ranging from footwear for sports such as; running, football, soccer, baseball, golf, volleyball, and trail shoes. They also provide athletic tops and bottoms for men, women, boys, and girls. In recent years, Under Armour has begun to create a lifestyle line of clothing, which is on a non-athletic nature (Brian, 2018). This latest line has changed Under Armour’s decision making in that it is no longer focusing solely on athletic apparel and is starting to expand into a business casual brand.OrganizedUnder Armour is organized into the following geographical segments. North America, EMEA (Europe, the Middle East and Africa), Asia-Pacific, Latin America, and beginning in 2017Connected Fitness became a new segment (Under Armour, 2017). Through this, Under Armour believes that fitness products are trending in a global direction, which suggests Under Armour will focus more on the international market rather than the North America segment. This despite the fact that the North America segment made up 76.5% of Under Armour’s total revenue in 2017. However, that is down from the 83% of total revenue that segment produced in 2016, and that is with total revenue increasing from 2016 to 2017.