How to compare companies

Company Comparison Criteria

Our group made the decision to evaluate the four footwear and apparel companies using a number of criteria, including financial analysis, product diversity, company repute, and ethical composition and working standards. This criterion can be used to find businesses that have a good chance of succeeding, solid brand recognition, and an easy time hiring employees (Apparel & Footwear, 2015). These three factors—well-trained employees, a reliable client base, and efficiently maintained financial records—are the core justifications for buying an existing company. All variables that can have an impact on the equity you intend to buy with your $15 billion must therefore be carefully taken into account.

First of all is financial analysis

This refers to the evaluation of a business' financial statements, including the balance sheet, income statement, and cash flow statements, to identify a viable investment. The financial data is commonly analyzed by using accounting ratios, including liquidity, leverage, activity, equity, and profitability ratios, to compare a company against another or its own historical performance. Through financial analysis, an investor is able to predict the financial flow and the profitability of a company (English, 2015; Pendarvis, 2017). A company with stable and increasing profitability with financial stability has a promising future and is worth investing the capital.

The second factors to be considered are the ethics and working code for the different company

Comparing how efficient and how well the Under Armor, Asics, Puma, and Sketchers companies implement their moral laws. The ethical code of practice regulates the internal operations in a business and how it interacts with its stakeholders and other businesses (Kell, 2014). Therefore, a company that has a high and working code of ethics has a well-organized internal structure where the social expectations of workers are attained, leading to a non-disputed workforce. A company with this setting is worth consideration since it has and will retain a positive image and be highly reputable.

The third factor is products variety for consumer choice

An appealing company has to customize products according to the various social and economic demographics of the society, especially in the footwear and apparel industry that goes by fashion. However, choice has to do with mass customization in the industry by giving consumers end products when, where, and how they want it (Pendarvis, 2017). Nowadays, consumer purchasing decision is greatly influenced by choice. But, to achieve the variety and customized products that reduce excessive stocks for the manufacturers, a company must integrate up-to-date technology in the production (Gaughan, 2015). The strategy helps to reduce competition by matching consumer needs with variety to choose from. Hence, a company with variety and moving products is worth consideration as it has the potential of expanding its market share and hence profitability.

Lastly, there is a need to consider the reputation and how well a company is known to the masses and prospective investors

This can be discovered by reviews by the public about a company, their products, services, and quality of their products. For example, Lululemon failed on their yoga pants due to the poor quality "see me through" (Kell, 2014). Inferior products lead to a poor review, which equals a bad reputation. So even if the business continues with a different management or owner, the setback would remain. An already well-marketed company is also one to be considered since it would save tons of money creating awareness of its presence among the masses. So, a company should invest as much as possible for its reputation that will help it improve on profitability and have a high market share.

Following the few but major areas criteria will ensure that there is value for your money despite the current or future economic statuses

There are plenty of credible information sources, both governmental and private resources, that will provide a comprehensible outline of all the four companies in mind. Other sources include the media, who are good at getting even the finest details like highlighting the poor conditions in the sweatshops of both developed and third-world countries (Pendarvis, 2017). Footwear and apparel always have a steady growth, especially in Europe, but face a few challenges like any other business.

References

Apparel and Footwear in 2015: Trends, Developments and Prospects. (2015) (pp. 1-42). Retrieved from http://www.euromonitor.com/apparel-and-footwear-in-2015-trends-developments-and-prospects/report

English, M. (2015). Financial Statement Analysis. Research Starters: Business. Retrieved March 2, 2017, from EBSCO Online Database Business Source Complete.

Gaughan, P. A. (2015). Mergers, Acquisitions, and Corporate Restructurings. Hoboken: Wiley.

Kell, J. (2014). Athletic apparel: Outperforming the competition in 2014. Fortune.com. Retrieved 28 February 2017, from http://fortune.com/2014/12/25/athletic-apparel-top-performer/

Pendarvis, E. (2017). What to Consider Before Buying a Business. Entrepreneur. Retrieved 28 February 2017, from https://www.entrepreneur.com/article/1965500