Nike is the market leader and Under Armour is an up-and-coming player in the hig
ID: 2481591 • Letter: N
Question
Nike is the market leader and Under Armour is an up-and-coming player in the highly competitive athletic apparel market. Reported below is selected financial information from their 2011 annual financial statements ($ in millions):
11.
value:
6.92 points
Required information
Calculate Nike's return on assets, profit margin, and asset turnover ratio for 2011. (Enter your answers in millions rounded to 2 decimal places.)
References
eBook & Resources
Problem BDifficulty: HardLearning Objective: 07-07 Describe the links among return on assets, profit margin, and asset turnover.
Check my work
12.
value:
6.92 points
Required information
Calculate Under Armour's return on assets, profit margin, and asset turnover ratio for 2011. (Enter your answers in millions rounded to 2 decimal places.)
References
eBook & Resources
Problem BDifficulty: HardLearning Objective: 07-07 Describe the links among return on assets, profit margin, and asset turnover.
Check my work
13.
value:
6.96 points
Required information
Nike is the market leader and Under Armour is an up-and-coming player in the highly competitive athletic apparel market. Reported below is selected financial information from their 2011 annual financial statements ($ in millions):
Explanation / Answer
Answer 1.
Nike 2011:
Proft Margin = Net Income / Sales
= 1566.70 / 19976.10
= 7.84%
Return on Assets = Net Income / Total Assets
= 1566.70 / 14049.60
= 11.15%
Average Total Assets = (Opening Assets + Closing Assets) / 2
= (13242.7 + 14049.6) / 2 = 13646.15
Assets Turnover Ratio = Net Sales / Average Total Assets
= 19976.10 / 13646.15
= 1.46
Answer 2
Under Armour 2011:
Proft Margin = Net Income / Sales
= 46.20 / 805.20
= 5.74%
Return on Assets = Net Income / Total Assets
= 46.20 / 567.60
= 8.14%
Average Total Assets = (Opening Assets + Closing Assets) / 2
= (470.60 + 567.60) / 2 = 519.1
Assets Turnover Ratio = Net Sales / Average Total Assets
= 805.20 / 519.10
= 1.55
Answer 3 a. Nike has higher profit margin than Under Armour.
Answer 3 b. Under Armour has higher assets turnover ratio than Nike.
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