Nike

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Nike

• Chris Gardiner
• ACG2021

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Executive Summary

• Nike is in a good financial situation. They have
  recently acquired strong companies and are still
  the leader in athletic footwear. There stock
  continues to grow at a steady pace.

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Part A. Introduction

• CEO Philip H. Knight
• Location of Home office Beavertown, Oregon
• Ending date of last Fiscal Period May 31, 2005
• Nike started out selling footwear in Oregon and
  now is involved in many different sports in many
  different countries.
• Nike is an international company with locations
  in over 160 different countries.

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Part A. Audit Report

• PriceWaterhouse Coo LP are Nikes independent
  auditors.

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Part A. Stock Market Information

• Most Recent Price 82.20
• 12 month trading period 92.43-68.61
• Dividends per share .95
• Date of above information May 31, 2005
• I recommend that you keep Nike stock. It is
  continuingly growing and shows no signs of
  stopping. In the long run Nike will gain you
  money.

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Part B. Industry Situation and Company Plans

• Nike is the leader in athletic footwear, and
  recently bought one of its strongest competitors,
  Converse. Also with the purchase of Hurley, this
  shows that Nike has plans to defiantly expand.

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Income Statement

• This Income Statement is a multi step
• 
  2004 2005
• Gross Profit 3561.8 6115.4
• Net Inc. Operations 1585.8 1859.8
• Net Income 326.8 1211.6
• (Charts in Millions)
• Gross Profit Increased because of increased
  sales.
• Net Inc. Operations and Net Income also increased.

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Part C. Balance Sheet

• Assets Liabilities
  SE
• 2004 8052.9 1907.9 6145
• 2005 8793.6 687.3 5644.2
• Comments
• Assests Increased by 740.7
• Liabilities Decreased by 1220.6
• SE Decreased by 500.8

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Part C. Statement of Cashflow

• Cash flows from operations are bigger than net
  income in the past two years.
• Nike generally finances its operations through
  the sale of stock.
• Nike has seen in increase in cash over the past
  two years.

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Accounting Policies

• Nike follows the Generally Accepted Accounting
  Policies.

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Part E. Financial Analysis and Liquidity Ratios

• 
  2004 2005
• Working Capital 3713.2 4351.9
• Current Ratio 2.9 3.2
• Debt-to-Equity Ratio .31 .12
• Profit Margin 4.4 13
• Return on Assets 11.3 14.5
• Return on Equity 18.9 23.2
• Return on Assets and Equity Increased. That
  means that they are making more money. Hence
  that is the reason that Profit Margin has
  increased along with Working Capital.

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Part E. Financial Analysis and Market Strength

• 2004 2005
• Price Earnings Per Share 21.68 18.3
• Dividend Yield .98 .95
• Price Earnings per Share has shown an increase
  in 2005. This is good for stockholders who
  should definatly keep and try to buy more stock
  at this point.