Financial Analysis Report: Adidas and Puma Performance

This report presents a comprehensive financial analysis of Adidas and Puma, two prominent companies in the footwear and accessories industry. Utilizing the CORE approach, the analysis examines the external and internal environments of both companies, alongside their financial positions, including revenue, assets, liabilities, and equity. The report includes a detailed ratio analysis to evaluate the efficiency and performance of both companies. The study compares revenue trends, employee numbers, and key financial metrics from 2014 to 2018. The findings suggest that Adidas demonstrates a more appreciable financial performance compared to Puma, which leads to the recommendation of including Adidas in an investment portfolio. The report also considers industry-specific factors such as consumer behavior, market trends, and macroeconomic indicators, providing a holistic view of the companies' financial health and future prospects.

Running head: FINANCIAL ANALYSIS OF PUMA AND ADIDAS
FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Name of the Student:
Name of the University:
Author Note

1FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Executive Summery
This report is prepared to analyse two companies that is Adidas and Puma in order to arrive at
a better investment decision. The approach used for studying and evaluating the overall
business and performance of both the companies includes the CORE Approach. Every
calculation can be found in the appendices section. The result drawn from the approach says
that the performance of Adidas is more appreciable than Puma. As a result, it will be
advisable to add Adidas in the investment portfolio.

2FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Table of Contents
Introduction................................................................................................................................3
Core Analysis of Adidas and Puma...........................................................................................3
Stage-1 (Context)...................................................................................................................3
Stage-2 (Overview)................................................................................................................6
Stage-3 (Ratios)....................................................................................................................14
Stage-4 (Evaluation).............................................................................................................17
Conclusion................................................................................................................................17
References................................................................................................................................18
Appendix..................................................................................................................................20

3FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Introduction
In today’s scenario making an investment decision has become a very crucial as well
as a complicated task. Companies have enough funds but where to invest the available funds
becomes a big question mark. In this report we had studied the business of two very famous
companies that is ADIDAS and PUMA for which we used the CORE approach. With the
help of this approach we tried to analyse the external and internal environment of the both the
business and had even studied the financial position of both the companies. The ratio analysis
is also conducted to evaluate the efficiency of both the companies in order to draw a better
conclusion for decision making.
Core Analysis of Adidas and Puma
Stage-1 (Context)
Context: External Profile
The Footwear & Accessories industry is comprised of the companies who actually
deal in the products like clothes for men, women, children, jackets, gloves, shoes, socks, and
accessories like belt, bag, purse, watches, umbrellas etc. The companies like Puma and
Adidas operates in the Footwear & Accessories industry under the consumer cyclical sector.
The stock of companies who belong from consumer cyclical sector depends largely upon the
economic conditions and the business cycle. This segment deals in those products which are
not actually the necessities of the common man and are usually the luxury products and we
can simply consider it as a discretionary purchase (Fidelity, N.D.). At the time of recession,
the people of the economy usually try to cut their discretionary expenses as a result of lower
disposable income and at the time of boom the sale of such goods take a good fly. In 2015
Adidas and Puma are the companies who deal majorly in sporting goods and as per the last
year Annual report of Adidas, the global sporting goods industry has shown an upward trend
in 2018. This growth was the result of the rising participation in sports, increasing health

4FINANCIAL ANALYSIS OF PUMA AND ADIDAS
consciousness, better e-commerce platforms, motivating theme of social fitness etc. The
FIFA WORLD CUP 2018 had also proved to be a major factor behind the success of the
industry. Now if we consider the success of sporting and other fashion accessories in which
companies like Adidas and Puma are engaged then this category did not see a very bright
result but at the same time it didn’t even report a fall. For this category 2018 was a mixed
year. The risks like trade protectionism and geopolitical tensions had increased in the year
2018 for sporting goods. In 2017, the sports shoes and apparel industry had noticed a very
quick growth. A rise of two per cent was seen in the footwear industry in United States. The
sports leisure category of athletic footwear had seen a growth of seventeen per cent. The top
sellers in sports leisure in United States were Nike, Skechers, Under Armour and Adidas. In
2017, Adidas’ revenue went up by fifty per cent (Johnson, Neugent and Granack, 2010).
At present, due to the trade restrictions like tariffs imposed on import is acting as a
major hurdle which can lead to price increase in the US market. More than half of the total
products are being manufactured in China but now Adidas has to shift few of its production
capacity to a new location because of the rising labour cost in China. This could certainly
affect the performance of the company. The people have become more health conscious for
which they require more sportswear like shoes, gym wear etc. and it is creating a better future
for Adidas products.
In the world of digitalization there are many concerns which relate to the security
issues. (Puma, 2018)In order to meet the rising securities concern Puma had invested a good
amount on maintaining IT infrastructure where main attention is given to business
intelligence.

5FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Overall, the footwear & Accessories industry is performing well as a result of increased
health consciousness, improved channels of e-commerce etc. whereas the factors like trade
protectionism, labour cost etc. may affect the performance of the industry.
Context: Internal Profile
Adidas started its journey in the year 1924 which was established by two brothers,
Rudolf and Adolf Dassler and it was founded in the year 1949. At present the company
carries out its operations in ten segments which include Europe, North America Adidas, Asia-
Pacific, North America Reebok, Latin America, Emerging Markets, Russia/CIS, Adidas Golf,
Runtastic, and other centrally managed businesses. The company deals in apparel, footwear
and accessories fitness equipment, golf clubs and hockey sticks etc.
Adidas is following Brand Leadership as their operating model which focuses on
building a consumer obsessed organisational structure which performs with good speed,
agility as well as empowerment. From 2015 ADIDAS is using Net Promoter Score (NPS) in
order to get an idea about the perception of consumers relating to brand and the factors which
motivate them to recommend the brand to their friends and relatives. The company was able
to improve its market share in their focussed market that is North America and Greater China.
As a result of excellent sustainability performance Adidas secured Gold class distinction and
was declared as a leader in Textiles, Apparel & Luxury Goods industry (Annual Report,
2018).
In 1948 the two brothers got separated and Rudolf dassler started a new company named as
PUMA Schuhfabrik Rudolf Dassler. Though the company was new but its success remained
remarkable. Their first football boot was a great hit. As a result in 1950 many of the members

6FINANCIAL ANALYSIS OF PUMA AND ADIDAS
of West Germany national team wore them in the football match which was to be played
against Switzerland, the first match after the war.
The designers of Puma design create the most desirable products that set the trend for
future and all these are carried out under the guidance of Torsten Hochstetter who is the
PUMA’s Global Creative Director. Puma has partnered with the elite ambassadors like Lewis
Hamilton, Bryson DeChambeau, Sergio Agüero, Antoine Griezmann, Borussia Dortmund,
Olympique de Marseille and AC Milan which has strengthen its position as a sport brand.
The company had also made connection with the women by signing Adriana Lima, a
supermodel as an ambassador for women’s training.
Stage-2 (Overview)
Now if we look at the revenue figure or the net sales of Adidas and Puma then in
Figure A we could easily identify that Adidas had always enjoyed a supreme position over
Puma in the past 12 years (2006-2018).
So
urce: (Statista, 2019)
Fig A. Revenue during 2006-2018

7FINANCIAL ANALYSIS OF PUMA AND ADIDAS
In Europe Adidas stands as the largest sportswear manufacturer whereas in the whole
world it enjoys the second position. Puma does not enjoys first, second or third position but
still it is also one of the leading brands in the world and it operates with the aim of becoming
the most desirable sports lifestyle company. Around seventy-five per cent of Puma’s sales
come from Europe and America. In the year 2018, with the motive of broadening the market
share Puma collaborated with Ergio Rossi, singer Rihanna and Alexander McQueen (Statista,
2019).
Sourc
e: (Puma Annual Report, 2015)
Fig: B Number of Employees in Puma
Table- A
Source: (Annual Reports, N.D.)
Year Number of employees
2011 46824
2012 46306
2013 49808
2014 53731
2015 55555

8FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Now if we analyse the decrease or increase in number of employees the two
companies had hired then in case of Puma the number had increased by ten per cent and in
case of Adidas it had increased by 18.6%. So here too we could easily interpret that the
business of Adidas has expanded more over the period of five years than Puma.
2014 2015 2016 2017 2018
0
50
100
150
200
250
Puma Revenue ( € million)
Revenue ( € million)
Graph 1: Changes in revenue over the years (PUMA)
2014 2015 2016 2017 2018
0
200
400
600
800
1000
1200
1400
1600
1800
Adidas Revenue ( € million)
Revenue ( € million)
Graph 2: Changes in revenue over the years (ADIDAS)
Every business except the Non-profit organisations, they all work with the motive of
increasing revenue over the years. Let us consider the revenue of Adidas and Puma in order

9FINANCIAL ANALYSIS OF PUMA AND ADIDAS
to check whether they had seen an increase or decrease in their revenues during the last five
years that is 2014-2018. In case of Puma the revenue had increased by one hundred seventy
one per cent during the past five years whereas the revenue of Adidas in the past five years
had increased by two hundred forty four per cent.
Table- B
Financial Statement Summary(Adidas)
Balance sheets
201
8
201
7
201
6
201
5
201
4
Overall %age
change over the
years
Property, Plant and Equipment
223
7
200
0
191
5
163
8
145
4 54%
Long term financial assets 276 236 194 140 129 114%
Other non-current assets 94 108 94 124 105 -10%
Cash and cash equivalents
262
9
159
8
151
0
136
5
168
3 56%
Accounts Receivables
241
8
231
5
220
0
204
9
194
6 24%
Inventories
344
5
369
2
376
3
311
3
252
6 36%
Other Current Assets 725 498 580 489 425 71%
Short term borrowings 66 137 636 366 288 -77%
Accounts Payables
230
0
197
5
249
6
202
4
165
2 39%
Other current liabilities 477 473 434 331 287 66%
Long term borrowings
160
9 983 982
146
3
158
4 2%
Other non-current liabilities 68 53 46 40 35 94%
Shareholders’ equity
637
7
603
2
647
2
566
6
562
4 13%

10FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Table- C
Financial Statement Summary(Puma)
Balance sheets
2018 2017 2016 2015 2014
Overall
%age
change
over the
years
Property, Plant and Equipment 294.6 260.1 252.1 232.6 224 32%
Other non-current assets 9.4 19.8 18.7 25.2 34.6 -73%
Cash and cash equivalents 463.7 415 326.7 338.8 401.5 15%
Accounts Receivables 553.7 503.7 499.2 483.1 449.2 23%
Inventories 915.1 778.5 718.9 657 571.5 60%
Other Current Assets 115.2 94.1 69.2 78.6 91.8 25%
Accounts Payables 705.3 646.1 580.6 519.7 515.2 37%
Other current liabilities 304.6 145.5 121.5 125.1 107.8 183%
Other non-current liabilities 2.9 3 2.3 2.2 2.5 16%
Shareholders’ equity 1722.2 1656.7 1722.2 1619.3 1618.3 6%
On looking at the financial position of Adidas we can see that the company’s current
as well as non-current assets have gone up which indicates the company’s efficiency in
meeting its long term and short term obligations (Rodriguez, Kaczmarek and Depew, 2016).
On coming to the liability side of Adidas, we could notice that company had actually avoided
the option of short term borrowings as a result of which the short term borrowings had come
down by a good percentage that is 77%. In case of Puma too the asset side had shown an
increasing trend over the five years period however, where the other non-current assets of
Adidas witness a fall of just 10% the Puma witnessed the same of 73%. This shows the
efficiency of Adidas in paying off its creditors over Puma.
Table- D

11FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Horizontal Analysis of PUMA
(Numbers in € million)
Increase or
(Decrease)
Period Ending 2018 2017
Amoun
t
Per
cent
ASSETS
Cash and cash equivalents 463.7 415 49 12%
Inventories 915.1 778.5 137 18%
Trade receivables 553.7 503.7 50 10%
Income tax receivables 33.9 26.8 7 26%
Other current financial assets 111.2 66.7 45 67%
Other Current Assets 115.2 94.1 21 22%
Current Assets 2192.8 1884.8 308 16%
Deferred income taxes 207.6 207.9 -0.30 -0.14%
Property Plant and Equipment 294.6 260.1 34.50 13.26%
Intangible assets 437.5 412.9 24.60 5.96%
Other non-current financial assets 65.4 51.7 13.70 26.50%
Other non-current assets 9.4 19.8 -10.40 -52.53%
Non-Current Assets 1014.5 952.4 62.10 6.52%
TOTAL ASSETS 3207.3 2837.2 370.10 13.04%
LIABILITIES AND SHAREHOLDER'S EQUITY
Current financial liabilities 20.5 29 -9 -29%
Trade payables 705.3 646.1 59 9%
Income taxes 68 54.7 13 24%
Other current provisions 39.6 86.2 -47 -54%
Other current financial liabilities 57.2 94.9 -38 -40%
Other current liabilities 304.6 145.5 159 109%
Current Liabilities 1195.2 1056.4 139 13%
Deferred income tax liabilities 47.7 37.6 10 27%
Pension provisions 28.9 29.7 -1 -3%
Other non-current provisions 26.3 34.6 -8 -24%
Liabilities from acquisitions 3.3 4.8 -2 -31%

12FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Other non-current financial liabilities 180.7 30.9 150 485%
Other non-current liabilities 2.9 3 0 -3%
Non-Current Liabilities 289.8 140.6 149 106%
Shareholders‘ equity 1,722.20 1,656.70 66 4%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,207.20 2,853.70 354 12%
Table- E
Horizontal Analysis of ADIDAS
(Numbers in € million)
Increase or
(Decrease)
Period Ending 2018 2017
Amoun
t
Per
cent
ASSETS
Cash and cash equivalents 2629 1598 1,031 65%
Inventories 3445 3692 -247 -7%
Trade receivables 2418 2315 103 4%
Income tax receivables 48 71 -23 -32%
Other current financial assets 542 393 149 38%
Other Current Assets 725 498 227 46%
Current Assets 9807 8567 1,240 14%
Deferred income taxes 651 630 21.00 3.33%
Property Plant and Equipment 2237 2000 237.00 11.85%
Intangible assets 2285 2180 105.00 4.82%
Other non-current financial assets 256 219 37.00 16.89%
Other non-current assets 94 108 -14.00
-
12.96%
Non-Current Assets 5523.0 5137 386.00 7.51%
TOTAL ASSETS 15330.0 13704.0
1,626.0
0 11.87%
LIABILITIES AND SHAREHOLDER'S EQUITY
Current financial liabilities 2552 2474 78 3%

13FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Trade payables 2300 1975 325 16%
Income taxes 268 424 -156 -37%
Other current provisions 1232 741 491 66%
Other current financial liabilities 186 362 -176 -49%
Other current liabilities 477 473 4 1%
Current Liabilities 7015 6449 566 9%
Deferred income tax liabilities 241 190 51 27%
Pension provisions 246 298 -52 -17%
Other non-current provisions 128 80 48 60%
Other non-current financial liabilities 103 22 81 368%
Other non-current liabilities 68 53 15 28%
Non-Current Liabilities 786 643 143 22%
Shareholders‘ equity 6,377.00 6,032.00 345 6%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
14,178.0
0
13,124.0
0 1,054 8%
In order to get a clear picture of the recent performance of Adidas and Puma we have
conducted a horizontal analysis of their balance sheets from where we could infer many of
the important facts. The cash and cash equivalents of Adidas had increased by 65% in the
year 2018 however in case of Puma the increased percentage was just 12%. This shows the
PUMA’s inefficiency in managing the working capital and ADIDAS’s efficiency in
managing its working capital (Warren and Jones, 2018). This will surely help the company in
meeting its short term obligations, day to day operations, suppliers etc. When we look at the
inventory of both the companies then in case of PUMA the inventory had increased by
eighteen per cent and in case of ADIDAS the inventory figure had declined by seven per
cent. There are two things which can be interpreted for both the companies wherein, one
could prove positive and the other could be negative for the company. First let us talk about
the Puma whose inventory has shown an upward trend over the five years period. It could be
positive in the sense that in case of any sudden increase in demand the company will be able

14FINANCIAL ANALYSIS OF PUMA AND ADIDAS
to meet all the demands and will surely not bear the loss of losing any of its customers.
However, it could be an indication of inefficient sales of the company as a result of which it
was not able to sell off its inventory leaving it abandoned and increasing the inventory
figures. So now when we look at the revenue figures of Puma in the same time period of five
years then it has gone up from where we may interpret that the company is efficient in its
sales and have maintained a good level of inventory to meet the uncertain demand of the
customers. In case of Adidas the inventory figure has gone down which may be interpreted
both positively as well as negatively. Positive could be that it is able to sell off its entire
product leading to reduction in the inventory figure. Negative could be the risk for the
company of not being able to meet all its demand in the future which may reduce its profit
amount (Dauderis and Annand, 2018). No doubt that the company had witnessed an increase
in its revenue amount over the same time period but might be company would have earned
more if it would have maintained enough inventories to meet the unmet demands of the
customers.
Now if we talk about the performance of Adidas’ shares then it had performed
amazingly well on the stock market as a result the company witnessed a rise of ninety-seven
per cent in the year 2016 and 2017. During the same period Adidas’ biggest competitor Nike
had witnessed a decrease of 3.7% in its value on the stock market.
Stage-3 (Ratios)
In order to evaluate the financials of the company more accurately it is better to
subdivide the ratios. Firstly we will evaluate the performance of the company in order to
know whether the company earned the profit or incurred loss. The performance of the
company will be evaluated with the help of the ratios like return on capital employed, asset
turnover, sales margin, gross profit margin, expense ratio, sales per employee etc. Second, in
order to understand the efficiency of the company in meeting their debt obligations and

15FINANCIAL ANALYSIS OF PUMA AND ADIDAS
recovering the lent amount from the debtors, inventory days, payable days etc. are calculated.
In order to understand the company’s ability to sell and replace its stock, inventory turnover
ratio is calculated (Banks, 2015). Third, to check the company’s capacity to meet both its
short-term and long-term obligations, both solvency and liquidity ratios are calculated.
Lastly, to understand the performance of the companies from the view point of stock market
the calculations like PE ratio, return on equity etc. are computed.
Table- F
Ratio Analysis
Category Ratios ADIDAS (2018) PUMA (2018)
Performance Ratios
Return on Capital
Employed 27% 16%
Asset Turnover 0.06 0.04
Sales Margin 8% 5%
Gross Margin 52% 48%
Expense ratio 387% 572%
Sales per employee
€384365.79
Million
€360501.01
Million
Profit per employee
€41532.20
Million
€27673.88
Million
Working Capital Ratios
Inventory days
using cost of sales 119 139
Receivable days 40 43
Payable days 80 107

16FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Liquidity Ratio Current ratio 1.44 1.83
Acid test ratio 0.93 1.07
Solvency Ratio Interest cover 3.55 3.75
Gearing 0.25 0.17
Shareholders' View
P/E Ratio 25.04 4.22
Earnings Per Share 8.46 12.54
Return on equity 0.27 0.13
Interpretation: For every Euro invested in capital, Adidas generated 27 cents in operating
income however Puma had generated only 16%. So, Adidas had generated a good return on
its capital employed. Adidas is even using its assets more efficiently than Puma in order to
generate sales. If we talk about Sales margin then Adidas had generated 3%more profit from
the sale of its product than Puma. Even the employees of Adidas are more efficient in
generating sales and profit for the company as compared to Puma. Overall, Adidas is
performing more efficiently than Puma.
Adidas is able to recover the amount from its debtors and is also being able to pay off
its creditors in less time than what is taken by Puma (Rodriguez, Kaczmarek and Depew,
2016). Adidas is even able to sell its entire inventory and replace it many more times than
Puma, where Puma is taking 139 days to replace its inventory, Adidas is taking just 119 days.
Working capital management of both the companies are good enough as a result of which
they have current ratio of around one from where we can interpret that both the companies
are sufficient enough to meet their short term obligations with the help of available current
assets.

17FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Both the companies have a good interest coverage ratio which shows the companies’
efficiency in meeting its interest expenses with the help of earning before paying interest and
taxes.
Now from the view point of stock market, Adidas is a better company to invest in because
its PE ratio is much higher than that of Puma. Adidas stock has a positive and better future
and investors are willing to pay more for its stock as a result it has a higher PE ratio than
Puma.
Adidas is giving less dividend to its shareholders’ as compared to Puma however the
amount contributed by the shareholders are being utilised more judiciously and efficiently by
Adidas as compared to Puma.
Stage-4 (Evaluation)
It will be beneficial for the company to invest in Adidas over Puma because Adidas
had carried out its business more efficiently than Puma as a result of which it had generated
more revenue and profit than Puma. Adidas had more cash and cash equivalent than Puma
which actually results in less payable days and is able to manage its working capital
requirements more proficiently. Adidas is able to succeed in its business because of its
efficient workforce who generates more sales and profit when compared with Puma’s
workforce. Even in the stock market the investors are more positive and are willing to pay
more for the stock of Adidas over Puma. Adidas is even utilising the shareholders’ equity
more prudently than Puma. So, it will be preferable for the company if it opt to add Adidas in
the investment portfolio.

18FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Conclusion
Both Adidas and Puma operate in the Apparel, footwear and accessories industry and
at present the industry is performing well. Both the companies get their maximum revenue
from their sportswear sector which is performing really well as result of increased health
consciousness among the population. On looking at the Financial performance of both the
companies over the last five years then Adidas had generated more revenue over Puma as a
result, Puma had more inventory left with it as compared to Adidas. Adidas has even
maintained a good figure of cash and cash equivalents than Puma as a result of which it is
able to meet its due obligations in lesser period of time. Now if we look at the performance of
Adidas’ stock in the stock market then it performed really well in the year 2017 which
resulted in a high PE ratio. So it will be a good decision to choose Adidas for the investment
over Puma.

19FINANCIAL ANALYSIS OF PUMA AND ADIDAS
References
Annual Report, 2015. Puma Training 2015.[Online].Available 13 May, 2019
http://report.puma-annual-report.com/en/group-management-report/puma-group-essential-
information/employees/.
Annual Reports, (N.D.). Financial Publications.[Online].Available 13 May, 2019
https://www.adidas-group.com/en/investors/financial-reports/.
Banks, E., 2015. Finance: the basics. Routledge.
Dauderis, H. and Annand, D., 2018. Introduction to Financial Accounting. Lyrnx.
Fidelity, (N.D.).Consumer Discretionary. [Online]. Available 13 May, 2019
https://eresearch.fidelity.com/eresearch/markets_sectors/sectors/sectors_in_market.jhtml?
tab=learn&sector=25.
Johnson, A., Neugent, A. And Granack, B. J. 2010. Footwear Industry Analysis:Nike, Inc.
and Adidas.[Online]. Available 13 May, 2019
https://mie480a43.files.wordpress.com/2010/12/mie-480-paper.doc.
Puma, (N.D.). Forever Faster From Day One PUMA TIMELINE. [Online]. Available 13
May, 2019 https://about.puma.com/en/this-is-puma/history/history.
Puma, 2018. Combined Management Report for the Financial Year 2018. [Online]. Available
13 May, 2019 https://about.puma.com/-/media/files/pdf/investor-relations/financial-reports/
puma-consolidated-financial-statements-2018.ashx.
Robinson, T.R., Henry, E., Pirie, W.L. and Broihahn, M.A., 2015. International financial
statement analysis. John Wiley & Sons.

20FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Rodriguez, J., Kaczmarek, P. and Depew, D., 2016. Visualizing Financial Data. John Wiley
& Sons.
Statista, (2019). Global revenue of Adidas, Nike and Puma from 2006 to 2018 (in billion
euros).[Online]. Available 13 May, 2019 https://www.statista.com/statistics/269599/net-
sales-of-adidas-and-puma-worldwide/
Warren, C. and Jones, J., 2018. Corporate financial accounting. Cengage Learning.

21FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Appendix
1. Graph 1: Changes in revenue over the years (PUMA)
Year
Revenue ( €
million)
% Increase or
decrease
2014 84.8
2015 61.7 -27%
2016 88.4 43%
2017 135.8 54%
2018 229.8 69%
Overall Increase/decrease
in revenue
171%
(229.8-84.8)/
84.8
2. Graph 2: Changes in revenue over the years (ADIDAS)
Yea
r
Revenue ( €
million)
%age Increase or
decrease
201
4 496
201
5 640 29%
201
6 1020 59%
201
7 1100 8%
201
8 1704 55%
Overall Increase/decrease in
revenue
244%
(1704-496)/
496
3. Table F: Ratio Analysis

22FINANCIAL ANALYSIS OF PUMA AND ADIDAS
A. Performance Ratio of Adidas and Puma
Ratios Formula ADIDAS (2018) PUMA (2018)
Return on
Capital
Employed
PBIT/Capital
Employed
where, Capital
employed=
Total assets-
Current
liabilities
2378/(15612-
6834) 27% 313.4/(3207.2-
1195.2) 16%
Asset
Turnover
Profit /
Average total
assets
1704/
(15612+14019) 0.06
229.8/
(2853.8+3207.2) 0.04
Sales Margin
Net profit/total
revenues 1704/21915 8% 229.8/4648.3 5%
Gross Margin
Gross profit /
Sales or
revenue
11363/21915
52% 2249.4/4648.3 48%
Expense ratio
Expenses
(excluding
tax) / Net sales
(using
operating
expenses/opera
ting income)
9172/2368
387% 1928.4/337.4 572%
Sales per
employee
Total sales/
Number of
employees 21915/57016
0.3843657
9 4648.3/12894
0.3605010
08
Profit per
employee
Operating
profit/Number
of employees 2368/57016
0.0415322
01 337.4/12192
0.0276738
85
B. Working Capital Ratio of Adidas and Puma
Ratios Formula ADIDAS (2018) PUMA (2018)
Inventory
days using
cost of sales
inventory×365/cost
of sales
3445*365/105
52
11
9
915.1*365/239
9
13
9
Receivable
days
trade receivables
×365/sales revenue
2418*365/219
15 40 553.7*365/464
8.3 43
Payable days
trade payables
×365/cost of sales
2300*365/105
52 80 705.3*365/239
9
10
7
C. Liquidity Ratio of Adidas and Puma
Ratios Formula ADIDAS (2018) PUMA (2018)

23FINANCIAL ANALYSIS OF PUMA AND ADIDAS
Current
ratio
current
assets/current
liabilities
9813/683
4 1.44
2192.8/1195.2
1.8
3
Acid test
ratio
(current assets
less
inventory)/curre
nt liabilities
9813-
3445/683
4 0.93
2192.8-
915.1/1195.2
1.0
7
D. Solvency Ratio of Adidas and Puma
Ratios Formula ADIDAS (2018) PUMA (2018)
Interes
t cover
profit before
interest and tax/
interest payable
2378/669 3.55 313.4/83.6 3.75
Gearin
g
total
debt/shareholde
rs' funds where,
shareholders'
funds= total
assets-total
liabilities
1609/1561
2-9248 0.25
289.7/
(3207.2-
1484.9)
0.17
E. Stock Market Analysis of Adidas and Puma
Ratios Formula ADIDAS (2018) PUMA (2018)
P/E Ratio
market value per
share/ earning per
share
211.82/8.4
6 25.04 52.96/12.54 4.2
2
Earnings Per
Share
8.46 (Annual Report
2018)
12.54 (Annual Report
2018)
Return on
equity
Net
income/Shareholder
s' Equity
1704/6377 0.27 229.8/1722.2 0.1
3