Lululemon Financial Statement Analysis

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against one another and see how each company has changed over the most recent years. Thus, we will be able to determine which company is more financially sound. To begin the financial statement analysis, we start by analyzing the balance sheets of the two companies. As seen in the provided Excel file, we have included the past four years of balance sheet information. For Under Armour, the statements range from the year end of December 31st, 2012 to December 31st, 2015. As for Lululemon, the statements range from the year end of February 3rd, 2013 to January 31st, 2016. To better understand the statements, the horizontal analysis of each company is placed directly after the two statements. The point of the horizontal analysis to see both …show more content…
Over the period, the company had decreased its cash amount by $217.6 Million. This equates to a change of -62.6%. As for Lululemon, they follow the same trend as Under Armour by decreasing their cash balance by $197.2 Million during the same period. In dollar value, it seems that the change is relatively the same, however Lululemon started with a much larger balance and the drop equated to only a decrease of -28.2%. Next, as we move down the B/S we see another major change and that is the change in Total Assets. For Under Armour, the company had increased assets by $1.3 Billion or 81.8%. As for Lululemon, they increased assets by only $64 Million or 5.2%. There is major difference between these two values and thus introduces the major differences between these two companies. The next account that I stuck out to me for Under Armour vs. Lululemon was the change in total current liabilities. For the Under Armour, the change was only a change of $52 Million or 12.2%. This was a modest increase compared to Lulu’s TCL account which increased $112 Million or 98.7%. The final account that we look at in these two statements is the change in retained earnings. For Under Armour, the change was an increase of $422.7 Million or 64.6%. This is a much stronger value compared to Lululemon which only had an increase of $95.7 …show more content…
Much like Under Armour, we once again see a downward trend in cash for Lululemon. At the start of the period we see cash make up 55.9% of TA and by the end only make up 38.2% of TA. This relates to our next set of trends which is an upward trend in both inventories and PP&E. At the start of the period we can see that inventories started at 14.9% of TA and ended up being 21.6% of TA. As for PP&E it started at 20.5% of TA and ended at 26.6% of TA. This leads us to believe that the company is spending cash by growing inventory amounts and other tangibles and we will look at the statement of cash flows later in the analysis to confirm this theory. The final trend that we will make note of is the upward trend in total current liabilities. We found this to be important because it is a different trend from what we saw in Under Armour. As mentioned, Under Amour’s TCL was decreasing as a percentage of TA. For Lululemon, the TCL started at 9.1% of TA and ended at 17.2% of TA. All of the values mentioned in this analysis show that Lululemon is spending for the future, however they chose to take on more short term debt compared to Under Armour which did the

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