Under Armour Case Study 7. What was this company’s ROE (return on stockholder’s equity) as of XXXXXXXXXX? (Hint: Calculate from Mergent Online; do not use pre-calculated ratios) 8. What was this...

6
UNDER ARMOUR CASE STUDY –ASSIGNMENT
Ans 7
     
     
     
     
     
     
     
    Ans 7
    Return on Equity (ROE): Formula
    Net Income
    
    
    
     
     
    
    Stakeholder Equity
    
    
    
     
     
    ROE (2019)
    
    
    
    
     
     
    Where Net Income in 2019
    $92,139
    
    
    
     
     
    Shareholders’ Equity
    $2,150,087
    
    
    
     
     
    
    
    
    
    
     
     
    ROE (2019)
    4.29%
    
    
    
     
     
    
    
    
    
    
     
     
    Du Pont 3 factor Model ROE
    Net Income
    x
    Net Sales
    x
    Total Assests
     
    
    Net Sales
    
    Total Assests
    
    Stakeholders Equity
     
    
    
    
    
    
     
     
    where Net Income in 2019
    $92,139
    
    
    
     
     
    Net Sales in 2019
    $5,267,132
    
    
    
     
     
    Total Assests
    $4,843,531
    
    
    
     
     
    Shareholders’ Equity
    $2,150,087
    
    
    
     
     
    Applying the value in the formula given we get:
    
    
     
     
    
    
    
    
    
     
     
    Du Pont 3 factor Model ROE
    4.29%
    
    
    
     
     
     
     
     
     
     
     
    Ans 8
    EPS as of 12-31-2019
     
     
    Net Income (loss) per share of Class A, B and C common
stock -Diluted /Per share
    $0.20
Ans 11 Fiscal 2020 EPS Forecast for this company = d.60
Ans 19     
Demand Determinants of this Industry as identified are as follows: Shifts in consumer preference can change in demand as below-
· Anticipated that relative popularity of sports and fitness activities also recent trend in athleisure in popular culture and among general population will alter the level of demand for athletic shoes from retailers.
· Intense marketing campaign of certain brands and sports can boost demand for respective footwear.
· Household disposal income changes also affects demand significantly because as disposable income increases consumer feeling good about their economic outlook also raise their spending level.
· Shifts in consumer spending are critical for this industry since retail demand is solely driven by changes in taste and preference of consumer.
· Seasonal or cyclical changes can also create demand for different type of footwear. E.g. Boots are preferred in winter over summers. Each season the players in Footwear Wholesaling industry must be ready to predict the timing of weather to deliver accurate stock.
· Consumer confidence is also regarded an important variable for spending fluctuating across seasons, increasing demand for products when rising along economic growth and low employment level.
· Terms and conditions of wholesale licence agreements are also important demand determinants. To attract demand from...