ELOISA REGENCIA

BSAIS – J501

REQUIRED:

1. Respond to Shayne's criticism that shareholders' equity does not represent the market value of the
company. What information does the statement of financial position provide?

The amount the company would be worth on December 31, 2x15 if it were to be
liquidated is its net worth of shareholders' equity. Therefore, the shareholders would receive the
difference if the Company's assets were sold and its debts were fully settled. The company's
financial activity, including revenues, losses, dividend declarations, and new capital investments,
determines how she moves. On the other side, market value is the price that investors are
willing to pay for the business. It is basically the company's stock market worth. In the market,
dealers, traders, and investors converse with one another. A contract cannot be made unless
they both agree on the same price. Market value changes in contrast with record value. It can be
impacted by changes in the economy, political events, environmental changes, bad public
relations, or anything else that has a big impact on investment decisions.

The Statement of Financial Position (SFP), sometimes known as the balance sheet or
income statement, displays the company's financial standing. It displays the assets, liabilities,
and ownership of the Company. The balance sheet shows the following in its simplest form. The
resources utilized to generate income and comply with commitments are known as assets.
Moreover, Liabilities are the money owed by the Company to other people or companies. These
debts may have been incurred to pay for operations or perhaps something else. And lastly, the
amount of a company's shares held by its shareholders is referred to as "shareholder's equity"
(SE).

2. The usefulness of the balance sheet is enhanced by classifying assets and liabilities according to
common characteristics. What are the classifications used in Under Armour's statement of financial
position, and what do those categories include?

Classifications are developed based on current and non-current parts according to the
term period of assets and liabilities. The current and non-current categories of Armour's assets
and liabilities were separated. Current assets are those that can be quickly converted into cash
within a year or while the business is operating. Assets that must be turned into cash over time
are referred to as noncurrent assets. These are challenging to achieve long-term investments.
Current liabilities are accounts receivable that are due today or within the next year. These are
developing responsibilities, and most of these are related to operations. Noncurrent Liabilities
include long-term loans and debts that aren't expected to maturity for another year.