INTERPRETATIONS:

Return of Capital Employed.

Return on capital employed should always be higher than the rate at which the company
borrows. Otherwise any increase in borrowing will reduce shareholders' earnings. A ratio
that indicates the efficiency and profitability of a company's capital investments. But
when we see the ratio of Adidas performance is worst in 2009 as compare to 2008. In
2009 it is 8.41% and it was 18.17% in 2008. Its denote shareholder equity is not using or
utilizing effectively by management.

Operating profit margin:

Operating profit margin is very useful in time series analysis and also cross sectional
analysis. A higher profit margin indicates a more profitable company that has better
control over its costs compared to its competitors Looking at the earnings of a company
often doesn't tell the complete story. Increased earnings are good, but an increase does
not mean that the profit margin of a company is improving. In Adidas operating profit
margin is worst in 2009 as compare to 2008. Operating profit margin is declining from
9.91% to 4.89%. So it shows the worst condition of Adidas regarding 2009.

Sales to Capital Employed:

Sales to capital emplyed show the relationship between sales and capital employed.
When we observe the situation of capital employed in Adidas in 2009 it is not good as
compare to 2008. Because the performance of shareholder equity is not remarkable due to
certain reason as compare to 2008.

Total Assets turnover:

Asset turnover measures a firm's efficiency at using its assets in generating sales or
revenue. The concept is the higher the number the better. In Adidas is better regarding
total assets turnover because it was 2.3 times in 2008 and it is 2.4 times in 2009. Total
assets turnover also indicates pricing strategy because total assets turnover shows the
relationship between sales and total assets.

Stock turn over in days:

The Stock turnover in days shows how many times over the business has sold the value
of its stocks during the year. In Adidas situation regarding stock turn over 2009 is better
because stock turnover is increase as compare to 2008. In 2008 it was 131 days and in
2009 it is 95 days.
Debtor turnover in days:
This ratio shows how well accounts receivable are being collected. In Adidas Debtors
turnover in days also better in 2009 as compare to 2008. In 2008 it was 52 days and in
2009 it is 47 days. It means that company liquidity position is better as compare to 2008.
And collection process is enhanced as compare to 2008

Creditors turnover in days:

Creditors turnover in days shows the relationship between creditors and cost of sales
Creditors turnover shows how well accounts payable payoff. Some times it is good when
the ratio of creditor’s turnover is falling and some times it is vise versa. Adidas situation
in 2009 company payoff its liability as much faster then 2008. So it is good signed for the
company but in other aspect the due to faster payment the liquidity position will be
affected. Some analyst is not considering good sign to company.

Current Ratio:

Current ratio shows the financial strength of the company. This ratio shows that company
has enough current assets to meet current obligation. In Adidas overall current ratio
position is much better in 2009 as compare to 2008. Because company has .58 times
more capital as compare to current liabilities. And also company current ratio is
increasing as compare to 2008.

Quick Ratio:

Quick ratio shows the relationship between quick assets and current liabilities and it is the
one of the best to measure of liquidity. In Adidas Quick ratio position is seem to be good
and as compare to 2008 it is remarkable performance, Quick ratio is increasing from .81
to 1.06. This is the wonderful for the company future ultimately.

Return on Equity:
Return on equity shows the relationship between EAT and equity. Return on equity
shows that how much return company is earning from the equity portion. But in Adidas
the situation of 2009 is worst as compare to 2008. Return on equity is falling from the
18.90% to 6.50%. Which is not good sign for the company progress. It shows the
company earning or return is falling from last year.

Dividend Yield:
Dividend yield is the financial ratio that shows how much a company pays out in
dividends each year relative to its share price. In 2008 it was 1.84% and in 2009 it is .93
which is worst condition for the shareholder. Because company payoff is falling from
last year. In short dividend yield is a way to measure how much cash flow you are getting
for each dollar invested in an equity position.
Earning per share:

Earnings per share used as an indicator of a company's profitability. It shows the

relationship between EAT and no of outstanding shares. But in Adidas Situation of EPS
is worst as compare to last year. The basic reason of decline EPS is the low profitability
in 2009. It is falling from 3.26 to 1.25 which is not good for the company.

Price Earning Ratio:

Price earning ratio is the technique which shows the relationship between Market price
and EPS.P/E ratio doesn't tell us the whole story by itself. It's usually more useful to
compare the P/E ratios of one company to other companies in the same industry. When
we observe the situation in 2009 it is seem to be good. Because company P/E is
increasing as compare to 2008. In 2008 it is 8.33 and it is excellent growth in 2009 is
30.22. That is good sign for the company future investment. In general, a high
P/E suggests that investors are expecting higher earnings growth in the future compared
to companies with a lower P/E ratio.

Dividend Cover:

Dividend cover is the financial tool which shows how many times over the profits could
have paid the dividend. Dividend cover is a measure of the ability of a company to
maintain the level of dividend paid out. These needs to be looked at in the context of how
stable a company's earnings are: a low level of dividend cover might be acceptable in a
company with very stable profits, but the same level of cover at company with volatile
profits would indicate that dividends are at risk. In 2008 Adidas dividend cover ratio was
6.52 times and in 2009 it was 3.57 times which not reliable condition is for the company.

Earning Yield:

It is the inverse of the P/E ratio and Earnings yield shows the percentage of each dollar
invested in the stock that was earned by the company. In Adidas the situation earning
yield is so much confusing and it is falling from 12.01% to 3.31% which is not good in
other words it is the worst condition for the entire company future.

Market to book value:

Market to book value is a ratio used to discover the value of a company by comparing the
book value of a firm to its market value. Book value is calculated by looking at the
firm's historical cost, or accounting value. Market value is determined in the stock
market through its market capitalization. In Adidas, the situation of Market to book value
in 2009 is as such better condition as compare to 2008. In 2008 it was 1.57% and now it
is 1.96%. That is seemed to be satisfactory condition for the Adidas and its shareholder.