Essay About Current Ratio And Total Assets

Financial Analysis of Columbia Sportswear Co.
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Financial Analysis of Columbia Sportswear Co.Columbia Sportswear is a popular clothing corporation. Columbia Corporation has total assets of $ 2,013,894,00 and $ 2,377,045,000 of net sales on December 31 of 2016. Comparing with L Brands, Inc. and H&M, with $ 8,170,000,000 total assets and $ 12,574,000,000 net sales; $ 12,369,269,955 total assets and $ 24,122,797,077 total sales on December 31 of 2016, which indicates that Columbia Sportswear Co. is in the medium size compared with other two companies. Columbia has debt structure of short-term and long-term debt, salaries, bonus, and product warranty. Then the current ratio, Columbia Sportswear has 3.89.and 3.41 in 2016 and 2015 which indicates the current ratio increased, caused low buyer power for Columbia. The quick ratio represents the short-term liquidity, it increased from 2.12 to 2.55 which means Columbia has a better liquidity position. Columbia has a lower degree of leverage and +financial risk because the debt to asset decreased from 0.23 to 0.22. The decrease from 0.3 to 0.27 indicate the company’s risk will decrease. From the time interest earned, Columbia has a great solvency because it increased from 225.04 to 246.78.The return on asset, net profit margin, and return on equity almost stay the same, the gross profit margin for Columbia is 0.44 which is smaller than H&M of 0.55 in 2016, and indicate a great business level.Columbia got cash and cash equivalents of $ 551,389,000 which consists of cash, money market funds, and time deposits.Columbia Sportswear Co. has a great financial health that the net income has increased from $ 179,851,000 to $ 198,439,000, Columbia gained a great profit during 2016. And all the ratios are positive, although Columbia’s total asset and total sales are smaller than L Brands and H&M, Columbia now in an increasing status which would be a great sign for financial health.AppendixColumbia Sportswear Co. Ratio20162015Profitability RatiosReturn on Assets ratio0.100.10Return on Equity ratio0.130.13Gross Profit Margin0.470.46Net Profit Margin0.080.08Activity RatiosInventory Turnover4.874.91Shareholders’ Return RatiosEarnings Per Share2.75(Basic), 2.72(Diluted)2.48(Basic), 2.45(Diluted)(Current Market Price per share from 12/31/2015: $48.76, 12/31/2016: $58.30)Price earnings ratio17.7321.20Liquidity RatiosCurrent Ratio3.893.41Quick Ratio2.552.12Leverage RatiosDebt to Assets0.220.23Debt to Equity0.270.30Times Interest Earned246.78225.04