Nike is the market leader and Under Armour is an up-and-coming player in the highly competitive athletic

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 2008 annual financial statements ($ in millions):

Nike Corporation ...............2008............. 2007

Net sales.................... $19,176.1...... $18,627.0

Net income ....................1,486.7......... 1,883.4

Total assets ..................13,249.6 ........12,442.7

Under Armour................ 2008............... 2007

Net sales .....................$725.2............ $606.6

Net income .....................38.2 ...............52.6

Total assets ....................487.6.............. 390.6

Required:

1. Calculate Nike's return on assets, profit margin, and asset turnover ratio for 2008.

2. Calculate Under Armour's return on assets, profit margin, and asset turnover ratio for 2008.

3. Which company has the higher profit margin and which company has the higher asset turnover?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio. Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...