Nike Vs Under Armour Financial Analysis

Satisfactory Essays
For this financial statement analysis project, I have chosen to compare Nike and Under Armour. There are several ratios that can give an overall idea of how a company has performed in comparison to another company with in the same industry, but before I jump into all of the math I would like to give a little bit of history on these two rival companies.
Nike Inc, (NKE) has long been a household name synonymous with athletic apparel, but it seems that newcomer Under Armour Inc, (UA) is becoming a viable threat to Nike’s status. Although Nike remains at the top, Under Armour recently muscled out Adidas to claim the number two slot for most popular sportswear company.
Nike was previously known as Blue Ribbon Sports (RBS) which was founded in 1964 by Phil Knight and Bill Bowerman. Phil Knight was a middle distance runner hailing from Portland who trained under track and field coach Bill Bowerman. Bill Bowerman was looking for ways to enhance his student’s performance and tried improving their shoes in his free time. Kicking off their business, which was established by now they tried to launch their own line of shoes. After years of struggle, in 1971 they came up with lighter weight training
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Nike trades at 3.5 times sales, almost 50% higher than its five-year average. Under Armour stock is similar, trading at 5.1 times revenue, or 24% higher than its five-year average. By multiples alone, UA is more expensive; but if you consider their five-year averages, Nike is actually worse given that Under Armour Inc is a younger, still-growing company.


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