Introduction
Brief History
Under Armour started off with a plan to make a superior T-shirt. A shirt that provided compression and took perspiration off your skin rather than absorbing it. A shirt that worked with your body to regulate temperature and enhance performance.
Founded in 1996 by former University of Maryland football player Kevin Plank, Under Armour is the company that started the now extremely popular market of performance apparel, sportswear engineered to keep athletes cool, dry and light throughout the course of a game, practice or workout.
Products
Under Armour sells everything related to sports apparel, from shirts and shoes to bags and water bottles. They’re mostly known for their compression sportswear. Their compression …show more content…
It has been slowly going up over the years but it is still well below the industry standard, over 3 times lower, so in recent years their management has been testing out different ways of distributing, producing and marketing their products to see how they can get their inventory turnover to reach the industry standard. Their sales have been greatly increasing over the years so brand awareness has been more of an importance to upper management so far but now that their company is really starting to threaten the big two sporting goods producers, Nike and Adidas, they’re putting more attention to inventory to try and take the edge over their …show more content…
This is the reason for them being able to more than double their revenue in the last 3 years.
Ratios Analysis
Current Ratio
Under Armour’s current ratio is above the desired 2:1, the industry standard and the sector standard. There was a small dip between 2014 and 2015 due to the large decrease in cash and equivalents. The drop was not as large as would be expected because Under Armour’s accounts receivable and inventory accounts both went up to balance out the drop in cash.
Accounts Receivable Collection Period
Under Armour’s accounts receivable collection period has been fairly good keeping under or around the ideal 30 day collection period but it has also been above the industry and sector standards. There was a small spike up in the last year due to a large increase in accounts receivable since 2014.
Inventory
Brief History
Under Armour started off with a plan to make a superior T-shirt. A shirt that provided compression and took perspiration off your skin rather than absorbing it. A shirt that worked with your body to regulate temperature and enhance performance.
Founded in 1996 by former University of Maryland football player Kevin Plank, Under Armour is the company that started the now extremely popular market of performance apparel, sportswear engineered to keep athletes cool, dry and light throughout the course of a game, practice or workout.
Products
Under Armour sells everything related to sports apparel, from shirts and shoes to bags and water bottles. They’re mostly known for their compression sportswear. Their compression …show more content…
It has been slowly going up over the years but it is still well below the industry standard, over 3 times lower, so in recent years their management has been testing out different ways of distributing, producing and marketing their products to see how they can get their inventory turnover to reach the industry standard. Their sales have been greatly increasing over the years so brand awareness has been more of an importance to upper management so far but now that their company is really starting to threaten the big two sporting goods producers, Nike and Adidas, they’re putting more attention to inventory to try and take the edge over their …show more content…
This is the reason for them being able to more than double their revenue in the last 3 years.
Ratios Analysis
Current Ratio
Under Armour’s current ratio is above the desired 2:1, the industry standard and the sector standard. There was a small dip between 2014 and 2015 due to the large decrease in cash and equivalents. The drop was not as large as would be expected because Under Armour’s accounts receivable and inventory accounts both went up to balance out the drop in cash.
Accounts Receivable Collection Period
Under Armour’s accounts receivable collection period has been fairly good keeping under or around the ideal 30 day collection period but it has also been above the industry and sector standards. There was a small spike up in the last year due to a large increase in accounts receivable since 2014.
Inventory