Under Armour's second quarter net income surged 77 percent behind very strong direct-to consumer sales and athletic clothing and footwear sales.  

The Baltimore-based apparel brand posted earnings on Tuesday of 6.2 million, or 12 cents per share, beating estimates of 8 cents per share. One of its biggest gains was taking its licensed hats and bags lines back in-house, allowing for the company to post a 266 percent revenue gain in that area,

The company also bumped up its full-year revenue guidance from between $1.37 to $1.39 billion to a new forecast of $1.42 to $1.44 billion. Wall Street analysts have estimated 2011 revenue at $1.4 billion.

The company has done a fantastic job of making headway in such an incredibly competitive market. Over the last year it has aggressively pursued athlete endorsement deals, signing NFL players Tom Brady and Cam Newton, NBA players Kemba Walker and Derrick Williams, as well as outfitting English premier league club Tottenham Hotspur.

There's no question that the company has put up terrific numbers, as it continues to beat Wall Street estimates, but it's worth taking a closer look at the company to determine whether the entire buzz is legitimate.

One potential issue raised by analysts is the potential cash flow issue on the horizon. Under Armour has aggressively used accrual accounting to push revenue through the roof, but some could find issue with that.

A lot of major companies do use accrual accounting, which takes into account all transactions and not just ones paid with cash, but analysts and investors alike become a bit weary if it is used too heavily.

According to The Motley Fool's analysis, Under Armour currently has a higher accrual ratio than revenue growth ratio. Over the past year, Under Armour's accrual ratio was 28.1 percent and revenue growth of 24.2 percent. In comparison, Under Armour's biggest rival, Nike, had an accrual ratio of 13.3 percent. The higher the accrual rate, the lower the quality of the earnings is what the analysis suggests.

This isn't a reason to push the panic button and completely avoid the company, but it does bear watching in the future. If everything is going great it might never arise as an issue, but if the growth does slow down, investors will take a much closer look at accounts receivable, which is what accrual accounting utilizes, versus cash on hand.

If thinking about investing a hefty sum of money in the company, keep that information in mind. The company continues to grow, but as long as it continues to utilize accruals heavily there will be sustainability issues surrounding the company.