Question

Under Armour Inc. Consolidated Statement of Income Dec. 31, 2015 Net Revenues 3,963,313 Cost of goods...

Under Armour Inc.
Consolidated Statement of Income
Dec. 31, 2015
Net Revenues 3,963,313
Cost of goods sold 2,057,766
Gross profit 1,905,547
Selling, general and administrative expenses 1,497,000
Income from operations 408,547
Interest expense, net -14,628
Other expense, net -7,234
Income before income taxes 386,685
Provision for income taxes 154,112
Net income 232,573
Under Armour Inc.
Consolidated Balance Sheet
Dec. 31, 2015 Dec. 31, 2014
Assets
Cash and cash equivalents 129,852 593,175
Accounts receivable, net 433,638 279,835
Inventories 783,031 536,714
Prepaid expenses and other current assets 152,242 87,177
Deferred income taxes 0 52,498
Total current assets 1,498,763 1,549,399
Property and equipment, net 538,531 305,564
Goodwill 585,181 123,256
Intangible assets, net 75,686 26,230
Deferred income taxes 92,157 33,570
Other long-term assets 78,582 57,064
Total assets 2,868,900 2,095,083
Liabilities and Stockholders Equity
Accounts payable 200,460 210,432
Accrued expenses 192,935 147,681
Current maturities of long term-debt 42,000 28,951
Other current liabilities 43,415 34,563
Total current liabilities 478,810 421,627
Long-term debt, net of current maturities 352,000 255,250
Long-term line of credit, noncurrent 275,000 0
Other long-term liabilities 94,868 67,906
Total liabilities 1,200,678 744,783
Stockholders' equity
Additional paid-in capital 636,630 508,350
Retained earnings 1,076,533 856,687
Accumulated other comprehensive loss -45,013 -14,808
Total stockholders' equity 1,668,150 1,350,229
Total liabilities and stockholders' equity 2,868,828 2,095,012

A) compute its finanical leverage, spread, and noncontrolling interest ratio for 2015

B) Assume that its return on equity for 2015 is 38.95% and its return on net operating assets is 26.58%. Confirm computations to yeild the relation: ROE = [RNOA + (FLEV x Spread)] x NCI ratio?

C) What do your computations of the nonoperating return imply about the company's use of borrowed funds?

Homework Answers

Answer #1

Solution:

a.2015 NNO= NOA – Total stockholders’ equity= $20,502 - $11,747 = $8,755

2014 NNO= $16,500 - $13,142 = $3,358

2015 FLEV = [($8,755 + $3,358) / 2] / [($11,747 + $13,142) / 2] = 0.4867

2015 NNE= NOPAT – Net income= $4,918 - $4,841 = $77

NNEP= $77 / ([$8,755 + $3,358] / 2) = 1.28%

Spread= RNOA - NNEP= 26.58% - 1.27% = 25.31%

NCI ratio= ($4,833 / $4,841) divided by [($11,708 + $13,109 / 2) / ($11,747 +$13,142 / 2)]= 1.0012

b.ROE= [26.58% + (0.4867 × 25.31%)] x 1.0012 = 38.95%

c. 3M's nonoperating return is negative that signifies either cost of debt is greater than the return on operating assets or more likely a return on investment that is less than the return on operating assets.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consolidated Balance Sheets - USD ($) $ in Millions Dec. 31, 2015 Dec. 31, 2014 Current...
Consolidated Balance Sheets - USD ($) $ in Millions Dec. 31, 2015 Dec. 31, 2014 Current assets Cash $ 390 $ 994 Short-term investments 5,864 6,309 Restricted cash and short-term investments 695 774 Accounts receivable, net 1,425 1,771 Aircraft fuel, spare parts and supplies, net 863 1,004 Prepaid expenses and other 748 898 Total current assets 9,985 11,750 Operating property and equipment Flight equipment 33,185 28,213 Ground property and equipment 6,402 5,900 Equipment purchase deposits 1,067 1,230 Total property and...
At December 31, 2015, the trading securities for Storrer, Inc. are as follows. Security Cost Fair...
At December 31, 2015, the trading securities for Storrer, Inc. are as follows. Security Cost Fair Value A $17,400 $16,200 B 12,300 13,800 C 23,500 19,200 $53,200 $49,200 Prepare the adjusting entry at December 31, 2015, to report the securities at fair value. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation...
Luther Corporation Consolidated Balance Sheet December 31, 2016 and 2015 (in $ millions) Assets 2016 2015...
Luther Corporation Consolidated Balance Sheet December 31, 2016 and 2015 (in $ millions) Assets 2016 2015 Liabilities and Stockholders' Equity 2016 2015 Current Assets Current Liabilities Cash 63.6 58.5 Accounts payable 87.6 73.5 Accounts receivable 55.5 39.6 Notes payable/ short-term debt 10.5 9.6 Inventories 45.9 42.9 Current maturities of long-term debt 39.9 36.9 Other current assets 6.0 3.0 Other current liabilities 6.0 12.0 Total current assets 171.0 144.0 Total current liabilities 144.0 132.0 Long-Term Assets Long-Term Liabilities Land 66.6 62.1...
Income Statement and Balance Sheet KRISPY KREME DOUGHNUTS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended...
Income Statement and Balance Sheet KRISPY KREME DOUGHNUTS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended Feb. 1, 2015 (In thousands, except per share amounts) Revenues $ 383,984 Operating expenses: Direct operating expenses (exclusive of depreciation and amortization shown below) 345,007 General and administrative expenses 23,458 Depreciation and amortization expense 8,709 Impairment charges and lease termination costs 548 Settlement of litigation — (14,930 ) Other operating (income) and expense, net 1,501 Operating income (loss) 4,761 Interest income 331 Interest expense...
Exercise 12-83 Dupont Analysis Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in...
Exercise 12-83 Dupont Analysis Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2019 2018 2017 Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740 $1,793,543 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) Special and nonrecurring items 2,617 0 0 Operating income $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments 0 9,117 0 Income before...
Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740...
Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740 $1,793,543 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) Special and nonrecurring items 2,617 - - Operating income $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments - 9,117 - Income before income taxes $645,179 $745,497 $660,302 Provision for income taxes 254,000 290,000 257,000 Net income $391,179 $455,497 $403,302 Net income per share $1.08 $1.25 $1.11...
Exercise 12-81 Profitability Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in...
Exercise 12-81 Profitability Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2019 2018 2017 Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740 $1,793,543 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) Special and nonrecurring items 2,617 0 0 Operating income $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments 0 9,117 0 Income before...
Costco Wholesale Corporation Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) August 28, 2016...
Costco Wholesale Corporation Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) August 28, 2016 August 30, 2015 August 31, 2014 Revenue Net Sales $116,073 $113,666 $110,212 Membership fees 2,646 2,533 2,428 Total revenue 118,719 116,199 112,640 Operating expenses Merchandise costs 102,901 101,065 98,458 Selling, general and administrative 12,068 11,445 10,899 Preopening expenses 78 65 63 Operating Income 3,672 3,624 3,220 Other income (expense) Interest expense (133) (124) (113) Interest income and other, net 80 104 90 Income before...
Exercise 12-82 Stockholder Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in...
Exercise 12-82 Stockholder Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2019 2018 2017 Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740 $1,793,543 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) Special and nonrecurring items 2,617 0 0 Operating income $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments 0 9,117 0 Income before...
Required information Comprehensive Problem 4 The following are the consolidated statement of earnings and the balance...
Required information Comprehensive Problem 4 The following are the consolidated statement of earnings and the balance sheet of Home Depot, Inc and Subsidiaries. THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS Fiscal Year Ended(1) amounts in millions, except per share data January 31,2016 February 1, 2015 February 2, 2014 NET SALES $ 66,192 $ 71,299 $ 77,359 Cost of Sales 43,752 47,292 51,341 GROSS PROFIT 22,440 24,007 26,018 Operating Expenses: Selling, General and Administrative 15,886 17,828 17,051 Depreciation...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT