Corperate Finaince- Under Armour

Under Armour as of June 29, 2012

a.) Long Term Debt $31.50M

Short Term Debt $42.39M

b.) Outstanding Shares = $104.46M

Price per share as of 08/27/2012 $55.55

Market capitalization = $104.46M x $55.55 = $5.9B

1.) Debt Ratio and Debt to Equity Ratio of Under Armour

A.) Total liabilities or debt = $73.89 M

Shareholders equity = $689.13 M

Capital Structure = $73.89 + $689.13 = $763M

Total Liabilities:

Debt ratio of UA as of 06/13/2012 = $73.89M / ($73.89 + $689.13)

Debt ratio of UA total liabilities = $73.89M/ $763M

Debt ratio of UA total liabilities = .0968 = 9.6%

a.) Debt to equity ratio = $73.89/ $689.13 = .1072 = 10.72%

Long term Liabilities:

B.) Debt to total Capital = $31.50M / ($31.50 + $689.13)

Debt to total Capital = $31.50M / $720.63 M

Debt to total Capital =.044 = 4.4%

b.) Long term debt to equity ratio = $31.50 / $689.13 = .046 = 4.6%

Short term Liabilities:

C.) Debt ratio of Short Term Capital Liabilities = $42.39M / ($42.39 + $689.13)

Debt ratio of Short Term Capital Liabilities = $42.39M / $731.520M

Debt ratio of Short Term Capital Liabilities = .058 = 5.8%

c.) Short term debt to equity ratio = $42.39 / $689.13 = .062 = 6.2%

Analyzing the level of debt a company has can help investors better understand how that company structures it’s finances, and help gauge a companies ability to meet future obligations. There are several different formulas or debt ratios that can be used to evaluate a company’s financial health. For the purpose of this module 2012 second quarter figures reported by Under Armour were used to calculate the debt to capital or capitalization ratio and the debt to equity ratio. The debt to equity ratio demonstrates financial leverage by...