Cash debt coverage ratio indicates a company’s ability to repay its liabilities from cash generated from operations. So, higher is better for this ratio. Cash from operating activities is 0.35 times higher than the average total liabilities. The ratio increased by 0.07 times and it indicates that the solvency of Under Armour become better than last year ended. The cash coverage ratio has actually increased in a reasonably substantial manner, growing from 56.86 in 2013 to 78.74 in 2014 year ends. With the incredible increase in cash provided by operating activities before taxes and interest of 281.52% between the year ends of 2013 and 2014, we observe a strong indicator of the company’s ability to pay off interest. But this strong increase in cash was offset by an increase in interest expense, which grew by 175.28%. The reason for this being the company’s desire to “maintain liquidity and fund business operations”* by signing long term debt agreements. When comparing the year ends of December 31 on 2013 and 2014, it becomes apparent that Under Armour is experience a large increase in remainder of cash after providing for …show more content…
The company has paid no dividends, so we only have increased capital expenditures offsetting the cash. The capital expenditures have been raised “to support international expansion and [their] brand and factory house strategies in the current year.” Under Armour’s free cash flow per share has shifted in a positive direction with an increase from $0.14 per share to $0.35 per share. This increase is caused by the increase in free cash flow from higher cash from operating activities but small increase in average common shares outstanding, Cash Flow Margin, a measure of how efficiently a company converts its sales into cash, increased by 2%. This slight change is due to big increase of Net Sales by $752,319, and small amount increase of Cash from operating activities by $98,936. The amount of $602,651 of increase in Net Sales took place in North America. The rest took place in other foreign countries and businesses with its percentage of net sales improving from 5.9% to 9.3% due to the expansion to other countries and acquisition of Map My Fitness,