Profitability ratios: Sales is very important for any business and a company’s growth and its future is determined by the sales revenue it has generated. Therefore analysts measure the return the company is earning on sales through some ratios and these are called as profitability ratios. The three important profitability ratios are gross profit margin ratio, operating margin ratio and net profit margin ratio. Calculate gross profit margin for 2015 and 2016 of Under Armour and Columbia Sportswear. Comment these measures as against assuming industry average as 31.7%.

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Answer 1

Question

Chapter 5, Problem 96.4C

To determine

Concept introduction:

Profitability ratios:

Sales is very important for any business and a company’s growth and its future is determined by the sales revenue it has generated. Therefore analysts measure the return the company is earning on sales through some ratios and these are called as profitability ratios. The three important profitability ratios are gross profit margin ratio, operating margin ratio and net profit margin ratio.

Calculate gross profit margin for 2015 and 2016 of Under Armour and Columbia Sportswear. Comment these measures as against assuming industry average as 31.7%.

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Answer 2

Question

Chapter 5, Problem 96.4C

To determine

Concept introduction:

Profitability ratios:

Sales is very important for any business and a company’s growth and its future is determined by the sales revenue it has generated. Therefore analysts measure the return the company is earning on sales through some ratios and these are called as profitability ratios. The three important profitability ratios are gross profit margin ratio, operating margin ratio and net profit margin ratio.

Calculate gross profit margin for 2015 and 2016 of Under Armour and Columbia Sportswear. Comment these measures as against assuming industry average as 31.7%.

Expert Solution & Answer

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Answer 3

Question

Chapter 5, Problem 96.4C

To determine

Concept introduction:

Profitability ratios:

Sales is very important for any business and a company’s growth and its future is determined by the sales revenue it has generated. Therefore analysts measure the return the company is earning on sales through some ratios and these are called as profitability ratios. The three important profitability ratios are gross profit margin ratio, operating margin ratio and net profit margin ratio.

Calculate gross profit margin for 2015 and 2016 of Under Armour and Columbia Sportswear. Comment these measures as against assuming industry average as 31.7%.

Expert Solution & Answer

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Answer 4

Question

Chapter 5, Problem 96.4C

To determine

Concept introduction:

Profitability ratios:

Sales is very important for any business and a company’s growth and its future is determined by the sales revenue it has generated. Therefore analysts measure the return the company is earning on sales through some ratios and these are called as profitability ratios. The three important profitability ratios are gross profit margin ratio, operating margin ratio and net profit margin ratio.

Calculate gross profit margin for 2015 and 2016 of Under Armour and Columbia Sportswear. Comment these measures as against assuming industry average as 31.7%.

Expert Solution & Answer

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Answer 5

Chapter 5, Problem 96.4C

To determine

Concept introduction:

Profitability ratios:

Sales is very important for any business and a company’s growth and its future is determined by the sales revenue it has generated. Therefore analysts measure the return the company is earning on sales through some ratios and these are called as profitability ratios. The three important profitability ratios are gross profit margin ratio, operating margin ratio and net profit margin ratio.

Calculate gross profit margin for 2015 and 2016 of Under Armour and Columbia Sportswear. Comment these measures as against assuming industry average as 31.7%.

Answer 6

Chapter 5, Problem 96.4C

To determine

Concept introduction:

Profitability ratios:

Sales is very important for any business and a company’s growth and its future is determined by the sales revenue it has generated. Therefore analysts measure the return the company is earning on sales through some ratios and these are called as profitability ratios. The three important profitability ratios are gross profit margin ratio, operating margin ratio and net profit margin ratio.

Calculate gross profit margin for 2015 and 2016 of Under Armour and Columbia Sportswear. Comment these measures as against assuming industry average as 31.7%.

Answer 7

Chapter 5, Problem 96.4C

To determine

Concept introduction:

Profitability ratios:

Sales is very important for any business and a company’s growth and its future is determined by the sales revenue it has generated. Therefore analysts measure the return the company is earning on sales through some ratios and these are called as profitability ratios. The three important profitability ratios are gross profit margin ratio, operating margin ratio and net profit margin ratio.

Calculate gross profit margin for 2015 and 2016 of Under Armour and Columbia Sportswear. Comment these measures as against assuming industry average as 31.7%.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 5 - When is revenue recognized?Ch. 5 - When is a performance obligation satisfied?Ch. 5 - At what amount should sales revenue be recorded...Ch. 5 - Prob. 4DQ Ch. 5 - Prob. 5DQ Ch. 5 - Prob. 6DQ Ch. 5 - Prob. 7DQ Ch. 5 - Prob. 8DQ Ch. 5 - Prob. 9DQ Ch. 5 - Why is the direct write-off method not GAAP?

Solution Summary: The author analyzes the profitability ratios of Under Armour and Columbia Sportswear.

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