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Appendix G Financial Analysis

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Located in Appendix B, the IFE Matrix proves our company is experiencing tremendous growth despite our relatively low market share within the industry (United States Securities and Exchange Commission, 2016a). Led by our astounding revenue figures for the past three years, which include 27.09% (2013), 32.26% (2014), and 28.50% (2015), as well as 29% during the first six months of 2016, UA’s growth figures far excelled both Nike (8.5% in 2013, 9.8% in 2014, 10% in 2015, 5.8% in 2016) and Adidas (-2.6% in 2013, 2.3% in 2014, 16.4% in 2015) during the same time frame (United States Securities and Exchange Commission, 2016b; United States Securities and Exchange Commission, 2016a; Adidas Group, n.d.). Additionally, as the CEO states in his mission …show more content…

For example, our connected fitness brand has recognized a 177% growth rate from 2014 as well as our international demand for apparel and footwear, which has acknowledge a 200% growth from 2013 (United States Securities and Exchange Commission, 2016a). As such, by developing our strategies to increase our employment third-party manufacturers, distributors, and suppliers, our costs of goods sold should remain at their similar rate of 52% of revenues from 2015 (United States Securities and Exchange Commission, 2016a). Additionally, due to our progressive domestic and international market share grow, I do not recommend deviating our marketing or advertising expenses relative to sales since we have recognized such positive response from our endorsement contracts. On the other hand, we must continue to increase our property, plant, and equipment (PP&E), inventory levels, and total assets to adequately meet our consumers’ growing demand for our products. However, we must also be aware of the need to increase our long-term debt by another 37% (identical to 2015), considering our low cash, ROE, and ROA values have hampered our retained earnings figures during the past three years (United States Securities and Exchange Commission, 2016a). Despite being associated with having a lower cost compared to equity financing, by accumulating additional debt we are increasing the risk of defaulting on our obligations if we were to recognize financial hardships within the near future (Investopedia, 2016). As a result, it is imperative that we develop our management effectiveness through the advancement of our supply chain as well as a more diversified investment

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