Under Armour Under Pressure: Ratio Analysis (Simplified Chinese Version)
(4 pages of text)
Case (Pub Mat)
An analyst at Vaux Gibson Inc., a fund that managed a portfolio of North American equities, was tasked with reviewing the fund’s holdings of Under Armour Inc. (Under Armour) and providing recommendations for the fund’s prospective investment strategy with the company. Under Armour had experienced significant revenues and bottom-line growth over the past three years, but this growth slowed significantly in 2017 and the company reported a net loss, resulting in the significant depreciation of its stock price. The analyst wondered if it was time to exit the investment, providing investors with an above-market return, or if there was still room for Under Armour to recover and grow.
This case is suitable for finance courses at the undergraduate level. After completion of this case, students will be able to
- analyze industry and economic factors to determine their effect on a firm’s performance;
- conduct granular analysis of three-statement models and determine how these statements work together;
- assess a firm’s financial performance with a focus on financial ratio analysis;
- identify cash flow and profit drivers;
- identify the determinants of value and stock price; and
- discuss the selection of a peer group for the purposes of financial comparison.
Finance and Insurance
United States, Small, 2018
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