Current Ratio

Current Assets/Current Liabilities

Introduction
Columbia Sportswear Company
began as a small family owned hat
distributor founded in Oregon by Paul
Lamfrom in the year 1938. Since the
time the company was founded it has
steadily built its way up to become
one of the powerhouses in the very
competitive outdoor recreation
industry. Columbia primarily
produces outerwear, sportswear,
footwear, along with camping
equipment, ski wear, and many other
different kinds of outdoor
accessories. The company even
earned the title of the largest
American seller of ski apparel in the
year 2001. With the growing
popularity of outdoor recreation and
winter sports in America and across
the globe, Columbia appears to be in
a prime position for future expansion
of the companies influence and
opportunities to provide more quality
products for a growing demand.
The current ratio is used to estimate
the ability of a business to meet its
short term financial obligations
(assuming ability to dispose of
inventory at full value).
Current Ratio
5
4
3
2
1
0
2016 2015 2014
2016: 3.9 2015: 4.3 2014: 2.9
Debt to Net Worth Ratio
Current and Long Term Liabilities/
Net Worth
The debt to net worth ratio is used to
compare total financial obligations of
the business to the investment of its
owners. In other words, it is utilized
by lenders as a measure of risk
involved in extending credit to the
business.

Following are key ratios that explain

various financial components of
Columbia Sportswear Company.
 Debt to Net Ratio Cash Ratio
0.33 3
0.32
2
0.31
1
0.3
0.29 0
2016 2015 2014 2016 2015 2014

2016: 0.3 2015: 0.3 2014: 0.32 2016: 1.6 2015: 2.7 2014: 2.8

Quick Ratio Debt Ratio

(Current Assets -
Inventories)/Current Liabilities Total Liabilities/ Total Assets
The quick ratio is used to estimate The debt ratio compares total
the ability of a business to meet its liabilities with total assets in order to
short term financial obligations see if debt is too high in relation to
without selling off its inventory. owners’ equity. A high debt ratio
indicates that the owners of the
Quick Ratio company are lenders rather than
investors, liability owners rather than
2.6
equity owners.
2.4
2.2
2 Debt Ratio
1.8
0.26
2016 2015 2014
0.24
0.22
2016: 2.5 2015: 2.1 2014: 2.4
0.2
0.18
Cash Ratio 2016 2015 2014

(Current Assets - Inventories -

Accounts Receivable)/ Current 2016: 0.2 2015: 0.23 2014: 0.24
Liabilities
The cash ratio measures a business’s
ability to pay off its current liabilities
with only cash and cash equivalents.
Return on Assets Summary
Net Profit After Taxes/Total Assets After completing and examining
Return on assets is an index useful for these ratios and reviewing
comparisons with other enterprises Columbia’s financial data I’ve
and with gauging the effectiveness of confirmed the company is in very
asset utilization. comfortable financial shape with
room to explore operations, new
Return on Assets opportunities, and expand the
0.1
company. 2016 was another record
0.08 year for the Colombia Sportswear
0.06 Company with sales increasing 2%
0.04
and the net income increasing a
0.02
0
respectable 10%. The company has
2016 2015 2014 demonstrated the ability to navigate
a wide variety of market conditions,
2016: 0.09 2015: 0.09 2014: 0.07 leverage their operating platforms,
and prioritize investments to drive
Columbia to profitable growth.
Return on Net Worth
Columbia has run a steady and
Net Profits After Taxes/Equity
growing operation over the past
This ratio measures the ultimate
decade and their financial numbers
profitability of the enterprise from
appear to be precisely where a
the perspective of
company of this size and magnitude
stakeholders/owners. It indicates the
should be. The company shows no
ability to earn adequate profits and
signs of slowing down and the data
should be higher than conservative
shows positive signs of growth,
investment rates.
stability, and expansion in the future.
Return on Net Worth
0.15 One Year Action Plan
0.1 Despite Columbia’s impressive track
record and consistent history of
0.05
financial success, we are constantly
0 looking for potential opportunities to
2016 2015 2014
grow the company and make
improvements. Moving forward, here
2016: 0.12 2015: 0.13 2014: 0.1 are four suggestions I confidently
believe will assist in continuing the
separation between Columbia and
competitors. They are as follows.
1. Continue focus on brand
strength, product innovation,
product design, functionality,
durability, effectiveness of
marketing efforts, and price.
2. Initiate a rewards program for
loyal/frequent customers
3. Establish and maintain long
term relationships with key
manufacturing partners
4. Increase budget and focus on
online marketing, stores and
wholesale channels
Here at Columbia we seek to drive,
anticipate and respond to trends and
shifts in consumer preferences by
adjusting our product offerings,
developing new products with
innovative performance features, and
generate consumer awareness and
demand. Our first priority needs to be
consistent investing in a continual
flow of new, innovative products and
demand creative initiatives that
outperform competition and
strengthen connection with
consumers and the company.
Initiating a rewards program will help
the company strengthen
relationships while rewarding
frequent and loyal customers. It is
extremely important to show those
who consistently support our
company we appreciate and value
their business. A rewards program
would do just this by offering
exclusive membership, discounts, and
reward points for purchase. Each
time an exclusive customer purchases
a product, points will go into the
buyers account for future purchases.
Implementing and maintaining a
customer rewards program is what
loyal Columbia customers deserve.
We believe that the use of contract
manufacturers greatly increases our
production capacity, maximizes our
flexibility and improves our product
pricing. This means we do not own
any manufacturing facilities. It is
extremely important we strengthen
our partnerships and continue to do
steady reliable business. Without
long-term commitments, there is no
assurance that we will be able to
secure adequate or timely production
and our favorable pricing terms. This
why it is so important we keep a
strong focus on maintaining these
relationships with manufacturers and
keep up with the many political risks,
factory capacity, import limitations
and costs, raw material costs,
availability, and the cost of labor.
There is no denying the impact of the
internet and technology in the
modern marketplace and industry.
Columbia must remain putting key
focus on the offering of broad online
assortments and strong brand
presentations on the worldwide web.
Also, we need to ensure our online
marketplace is a place where
consumers enjoy outstanding service
and fast delivery. By expanding online
opportunities, and increasing budget
use on online resources and
management, we will be able to
capitalize on the future and remain a
top competitor. We can use options
like using our branded e-commerce
sites and stores to tell compelling
brand, technology, and style stories
to engage consumers who are looking
for our most current products.