Columbia Sportswear Company (COLM) (Essay Sample)

Student’s Name Instructor’s Name Course Date Columbia Sportswear Company (COLM) Based on the information given, the investor has a liquid net worth of $ 1,000,000 which he/she has invested in different areas. Some have been invested in the S&P 500 index whereas the rest have been invested in a medium-duration high-quality bond. Nevertheless, there is a 20% of the liquid net worth invested in a savings account and earning 5% interest every year. The problem in this whole scenario is the 20% savings. Money being in the saving account in most cases is not regarded as invested money despite the small annual interest it earns. Nevertheless, it is sometimes better to have it in the saving accounts that investing it somewhere else if at all the interest rates are not of worth. In this case, the issue is determining whether to take $100,000 from the saving account and use it to purchase common stocks from Columbia Sportswear Company (COLM). Before concluding whether to invest at Columbia Sportswear Company (COLM), several factors ought to be put into considerations. It is important to determine the financial position of the company and its efficiency. The financial position can be known directly from the firm’s financial statements, but its efficiency will only be noted by carrying some ratio analysis. Based on information from Nasdaq, the current company’s share price is $88.04, and in the previous fiscal year, the company closed with a net profit of $105,123,000 (www.nasdaq.com). This is an indication that the company made a positive figure in its financial year, but it is not a measure of efficiency. Therefore, several ratios are calculated to assess its efficiency. The current ratio, quick ratio, gross margin and return on assets of3.64, 2.63, 0.47 and 0.06 respectively (www.nasdaq.com). Most of these ratios show an improvement from the previous year’s which include 2014, 2015 and 2016 which indicate that the enterprise is heading in the right direction and its worth to invest in. Any investment that has returned has some risks involved which are termed as the probability that something goes wrong the negative consequences if it does. Therefore, it is important to carry out a risk analysis which helps in identifying and managing potential problems. Accounting the risk requires market analyses, whereby the economic, political and social factors are all put into considerations. To come up with a better decision while deciding on a particular investment, it is always important to use other companies and the overall market as a benchmark. One has to compare the company with other companies who are in the same field. In this case, while Columbia Sportswear Company (COLM) has a share price of $88.04, its close competitors who include Canada Goose Holdings Inc, Centric Brands Inc and Delta Apparel Inc have $62.82, $5.50 and $18.27 (ww...