Annual Report Analysis Of Three Companies In Sportswear Industry
ACCT 101
Group Project
WU, Xiaoyue 07635218
LI, Xiaopeng 07642546
TIAN, Yuan 07637369
MAN, Ka Wai 08089325
CHEN, Li 07641736
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Introduction
The sportswear industry is one of the most competitive and lucrative industries. Investors all over the world are attracted by the major players in the industry. This report will provide a thorough examination on three industry leading companies, Timberland Company, Columbia Sportswear and Nike, through the lens of three perspectives to help investors make a better decision. The three perspectives adopted are often referred to as the determinants of a company’s performance:
• Individual company factors: Financial ratio and management strategies will be analyzed to explain reflect the management effectiveness.
• Industry factors: Supply and demand factors within the industry will be used to reveal potential risks.
• Economy-wide factors: Financial crisis’s impacts on different companies will be analyzed.
After the analysis from the three perspectives, recommendations will be provided to fit the different level of expectations of return and risk.
Timberland
Background
The Timberland Company mainly produces outdoor footwear, apparel and accessories. For 2007, the proportion of revenue by product is: Footwear (70%), apparel and accessories (28.6%), and royalties (1.86%). The products target at a variety of customer segments under specified brands: Timberland, Timberland PRO, Smartwool, Timberland Boot Company, Mion, GoLite, Howies and IPATH. For 2007, 48.8% of the total sales revenue is generated from the US market segment.
Recent Performance
1. Decline of Profitability
| |2005 |2006 |2007 |
|Return on Assets |0.2285 |0.1227 |0.0471 |
Return on...
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