Purpose: To help you understand and compare the performance of two companies in the same industry.
Find the Columbia Sportswear Company Annual Report located in Appendix A and go to the financial statements starting on page 740. Now access the 201 0 Annual Report for Under Armour, Inc., from the Internet. For instructions on how to access the report online, see the Industry Analysis in Chapter 1. The company’s financial statements start on page 43.
Which of these companies would be considered to be merchandising businesses? If your answer was “both companies are merchandising businesses,” you would be correct. But how did you know that? If you didn’t know anything about either of these two companies (maybe you’re already familiar with them through their advertising campaigns), how would you know that they are merchandising businesses? Can you tell that by looking at the consolidated balance sheets for both companies? What about the consolidated statements of income (or operations)? Which accounts on these two financial statements tell you that these companies are merchandising businesses?