The following data (in thousands) were taken from recent financial statements of Under Armour, Inc.: December31 year 2year 1 current assets$689,663$558,850 current liabilities183,607149,147 A. Compute

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03.07.2022 - 21:00

The following data (in thousands) were taken from recent financial statements of Under Armour, Inc.: December31 year 2year 1 current assets$689,663$558,850 current liabilities183,607149,147 A. Compute

Question:

The following data (in thousands) were taken from recent financial statements of Under Armour, Inc.:

		December 31
	Year 1	Year 2
current assets	$689,663	$558,850
current liabilities	$183,607	$149,147

A. Compute the working capital and the current ratio as of December 31, Year 2 and Year 1. Round to two decimal places.

B. What conclusions concerning the company’s ability to meet its financial obligations can you draw from part (a)?

Answers (1)

Florine April 11, 2023 в 14:03

A. Working capital Year 1 = current assets Year 1 - current liabilities Year 1 = $689,663 - $183,607 = $506,056 Working capital Year 2 = current assets Year 2 - current liabilities Year 2 = $558,850 - $149,147 = $409,703 Current ratio Year 1 = current assets Year 1 / current liabilities Year 1 = $689,663 / $183,607 = 3.76 Current ratio Year 2 = current assets Year 2 / current liabilities Year 2 = $558,850 / $149,147 = 3.75 B. The working capital has decreased from Year 1 to Year 2, indicating that the company has less funds available to meet its short-term obligations. However, the current ratio has remained relatively stable, with only a slight decrease. This suggests that the company is still able to meet its financial obligations. However, further analysis of the company's financial statements would be needed for a more comprehensive assessment of its financial health.

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