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1. Liquidity ratio:
Current Assets
Current ratio=
Current Liablities

2020 2019
( million) (milliom)
Puma Adidas Puma Adidas
Current asset 2.613,00 12.154,00 2.481,20 10.934,00

Current 1.872,80 8.827,00 1.558,90 8.754,00

liability
Current ratio. 1,395237078 1,376911748 1,591635127 1,249029015
( times)

- In 2020
 For each euro of current liability, Puma company has 1.395 times its current
assets to convert into cash to pay current liabilities.
 For each euro of current liability, Adidas company has 1.377 times its current
assets to convert into cash to pay current liabilities.
- In 2019
 For each euro of current liability, Puma company has 1.592 times its
current assets to convert into cash to pay current liabilities.
 For each euro of current liability debt, Adidas company has 1.249 times
its current assets to convert into cash to pay current liabilities.

- Puma: A quick analysis of the current ratio tells you that the company's
liquidity has gotten just a little bit worse between 2020 and 2019.
- Adidas: A quick analysis of the current ratio tells you that the company's
liquidity has gotten just a little bit better between 2020 and 2019 since
it rose from 1.249X to 1.377X.
- Comparision : Puma’s current ratio (1,395x) is greater than Adidas’s current
ration( 1.377x) proves that Puma’s liquidity is better (2020) .

Current assets−Inventories
Quick ratio=
Current liablities

2020(miilion) 2019 (million)

Puma Adidas Puma Adidas
Current Asset- ( 2.613,00- 12.154,00- (2.481,20 – (10.934,00 –
Inventories 1.138,00) 4.397,00) 1.110,20 ) 4.085,00)
Current 1.872,80 8.827,00 1.558,90 8.754,00
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liabilities
Quick ratio 0,79 0,88 0,88 0,78
(times)

- In 2020
 For each euro of current liability , Puma company has 0,79 times its current
assets to convert into cash to pay current liabilities.
 For each euro of current liability , Adidas company has 0,79 times its current
assets to convert into cash to pay current liabilities.
- In 2019
 For each euro of current liability, Puma company has 0,88 times its
current assets to quickly convert into cash to pay current liabilities.
 For each euro of current liability, Adidas company has 0,78 times its
current assets to quickly convert into cash to pay current liabilities.

o Both company with a quick ratio less than 1 is unlikely

to be able to repay current liabilities and must be
carefully considered.

- Puma: A quick analysis of the current ratio will tell you that the
company's quick liquidity has gotten just a little bit worse between
2020 and 2019.
- Adidas: A quick analysis of the current ratio will tell you that the
company's quick liquidity has gotten just a little bit better between
2020 and 2019 since it rose from 0,78X to 0,88X.
- Comparison: Puma’s quick ratio (0.79X) is lower than Adidas’s quick
ratio( 0.88X) proves that Puma’s liquidity is worse (2020).

2. Debt Management Ratios:

Total Debt to Capital

Total debt Total debt

=
Total capital Total debt+ Equity(Total captital)

2020 ( million) 2019 ( million)

Puma Adidas Puma Adidas
Total debt 931,7 5.890,00 755,50 4.770,00

Total captital 1.722,40 8.936,00 1.873,60 8.391,00

Debt-to-capital 54% 66% 40% 57%

(%)
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- In 2020
 Puma’s debt ratio is 54%, which means that its creditors
have supplied roughly half of its total funds.
- Debt ratio of Puma in 2020 ( 54%) is larger than its in 2019( 40%) , proving
that the company has good finance, so it may be willing to borrow debt or
issue common shares to pay for Puma's operations.

- Compared to Adidas, puma has a lower debt ratio( 54% < 66%) , so Puma's
debt protection for creditors is higher, so the company will attract more long-
term debt.
Time - interest – earned ratio ( TIE)

EBIT
TIE=
Interest charges

2020 ( million) 2019 ( million)

PUMA ADIDAS PUMA ADIDAS
EBIT 240,20 739,00 465,40 2.718,00

Interest 77,90 164,00 47,80 160,00

charges
TIE (euro) 3,083440308 4,506097561 8 16,9875

- In 2020
 For each euro interest payable, Puma company has 3,08 euro of
profits used before interest and taxes.
 For each euro interest payable, Adidas company has 4,51 euro of
profits used before interest and taxes.
- In 2019
 For each euro interest payable, Puma company has 8 euro of profits
used before interest and taxes
 For each euro interest payable, Puma company has 16, 98 euro of
profits used before interest and taxes

- The Puma's TIE ratio in 2020 (3.08) is less than half of 2019 ( 8 ) and less than
Adidas’s ( 4,51) ,indicating that the company's ability to pay interest has
decreased significantly due to Covid and inefficient use of capital.

3. Market Value Ratio

Price/Earning Ratio ( P/E)

Price per share
P/ E=
Earning per share
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2020 ( million) 2019 ( million)

PUMA ADIDAS PUMA ADIDAS
Price per 11,42 32,20
share 12,42
33,91

Earning per 0,52 3,36 1,74

share 9,57

P/E ( euro) 21,83016477 9,580856102 7,140243902 3,545122587

- In 2020
 Puma: Investors are willing to spend 21,83 euro just to get 1 euro
profit.
 Adidas: Investors are willing to spend 9,58 euro just to get 1 euro
profit.

- In 2019

 Puma: Investors are willing to spend 7,14 euros just to get 1 euro
profit.
 Adidas : Investors are willing to spend 21.83 euros just to get 1 euro
profit.

- Puma’s P/E in 2020 is 3 times larger than that of 2019, showing that
investors' profit expectation is quite high.
- Puma’s P/E is larger than Adidas’s shows that Puma is doing better, more
popular in the market,and higher liquidity.( 2020 )

Market/ Book Ratio ( M/B)

Market price per share

M /B=
Book value per share

2020 ( million) 2019 ( million )

PUMA ADIDAS PUMA ADIDAS
Marker price 11,42 32,20 12,42 33,91
per share
Book value 1.278,90 4.245,00 1.419,00 4.375,00
per share
M/B Ratio 0,008929437 0,007586105 0,008754294 0,007750736
( times)
- Puma’s M/B is keeping stable during 2019 -2020.
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- The Market to Book ratio of Puma and Adidas are low ratios (less
than 1) could indicate that the stock is undervalued (a bad
investment) and there is something wrong with both of two.