Problems Under Armour, Inc. is an American supplier of sportswear and casual apparel. Following are selected financial data for the company for the period 2009-2013. 2012 2009 5.5 100.0 2010 6.4 2011 6.6 7.0 Profit margin (96) Retention ratio (%) Asset turnover (X) 100.0 1.6 1.7 24.2 100.0 1.6 19 100.0 1.6 Financial leverage (X) 1.7 Growth rate in sales (%) 18.1 Source: Data from Under Armour 2009-2013 annual reports 38.4 1.6 1.8 24.6 2013 7.0 100.0 1.5 19 27.1 a. Calculate Under Armour's annual sustainable growth rate for the years 2009 through 2013. b. Did Under Armour face a growth management challenge during this period? Please explain briefly. c. How did Under Armour cope with this challenge? d. Calculate Under Armour's sustainable growth rate in 2013 assuming a profit margin of 8.0%. Calculate the sustainable growth rate in 2013 assuming a financial leverage of 2.40 times. Calculate the sustainable growth rate in 2013 assuming both of these changes occur. Answers Calculations, if necessary
Problems Under Armour, Inc. is an American supplier of sportswear and casual apparel. Following are selected financial data for the company for the period 2009-2013. 2012 2009 5.5 100.0 2010 6.4 2011 6.6 7.0 Profit margin (96) Retention ratio (%) Asset turnover (X) 100.0 1.6 1.7 24.2 100.0 1.6 19 100.0 1.6 Financial leverage (X) 1.7 Growth rate in sales (%) 18.1 Source: Data from Under Armour 2009-2013 annual reports 38.4 1.6 1.8 24.6 2013 7.0 100.0 1.5 19 27.1 a. Calculate Under Armour's annual sustainable growth rate for the years 2009 through 2013. b. Did Under Armour face a growth management challenge during this period? Please explain briefly. c. How did Under Armour cope with this challenge? d. Calculate Under Armour's sustainable growth rate in 2013 assuming a profit margin of 8.0%. Calculate the sustainable growth rate in 2013 assuming a financial leverage of 2.40 times. Calculate the sustainable growth rate in 2013 assuming both of these changes occur. Answers Calculations, if necessary
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Qd.5.
Transcribed Image Text:Problems
Under Armour, Inc. is an American supplier of sportswear and casual apparel.
Following are selected financial data for the company for the period 2009-2013.
2010
2011
2012
2009
5.5
100.0
6.6
7.0
100.0
1.6
1.9
Profit margin (%)
Retention ratio (%)
Asset turnover (X)
1.6
1.7
6.4
100.0
1.6
1.7
24.2
100.0
1.6
Financial leverage (X)
Growth rate in sales (%)
18.1
38.4
Source: Data from Under Armour 2009-2013 annual reports
1.8
24.6
2013
7.0
100.0
1.5
1.9
27.1
a. Calculate Under Armour's annual sustainable growth rate for the years 2009
through 2013.
b. Did Under Armour face a growth management challenge during this period?
Please explain briefly.
c. How did Under Armour cope with this challenge?
d. Calculate Under Armour's sustainable growth rate in 2013 assuming a profit
margin of 8.0%. Calculate the sustainable growth rate in 2013 assuming a
financial leverage of 2.40 times. Calculate the sustainable growth rate in 2013
assuming both of these changes occur.
Answers
Calculations, if necessary
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education