1. How much inventory does Nike hold as of May 31, 2020? $7,367 2. Estimate the amount of merchandise that Nike purchased during the year that ended May 31, 2020 (Hint: Use the cost of goods sold equation). $21,162 3. What method does Under Armour use to determine the cost of its inventory? 4. Compute the Inventory Turnover ratio (cost of goods sold from the income statement divided by average inventory) for both Nike and Under Armor for the most recent fiscal year displayed. Show your work and report the ratios in the below table. Discuss in a 2-3 complete sentences, what you can infer from the difference. Nike Under Armour 5. Compute the Days in Inventory for Under Armor and Nike for the most recent fiscal year displayed. Discuss in a few sentences, what you can infer from the difference. Nike Under Armour FISCAL 2020 FISCAL 2019 CHANGE CURCING CURRENCY FISCAL 2018 S CHANGE $ 23.30 BAN Daars m. NIKE, Inc. Ravenna NIKE Brand Revenues Apparel suomar Total NIKE Brand Revenues Converse TOTAL MIKE, INC. REVENUES kanel Mike Brand Revenue Details Sales to Wholesale Customer Sales through NIKE Direct TOTAL NIKE BRAND REVENUES NIKE Brand Revenues on a Wholesale Equivalent Basis:11 fromax WHOLESALE EQUIVAT De Olive NIKE Brand Wholesale Equivalent Revenues by:11) $ $ 2 999 $ 35.568 19 23.156 obce $ $ ESBE $ d TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES NIKE Brand Wholesale Equivalent Revenuss by:1) Rahang Jordan Brand Footbaloocan Sportswear OTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES NIKE, INC. CONSOLIDATED BALANCE SHEETS MAY 31, 2020 2019 $ 4,466 197 8,348 $ 439 2,749 7,367 1.653 20,556 4,272 5,622 1,968 16,525 4,744 4,866 3,097 274 223 283 154 2.011 23,717 2,326 $ 31,342 $ $ 3 $ 249 9 in Millions) ASSETS Current assets: Cash and equivalents Short-term investments Accounts receivable, net Inventorles Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Operating lease right-of-use assets, net Identifiable intangible assets, net Goodwill Deferred income taxes and other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt Notes payable Accounts payable Current portion of operating lease liabilities Accrued liabilities Income taxes payable Total current liabilities Long-term debet Operating lease liabilities Deferred income taxes and other liabilities Commitments and contingencies (Note 18) Redeemable preferred stock Shareholders' equity: Common stack at stated value: : Class A convertible - 315 and 315 shares outstanding Class B - 1,243 and 1,253 shares outstanding Capital in excess of stated value Accumulated other comprehensive income (loss) Retained earnings (deficit) Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,612 2,248 445 5,184 156 8,284 9,406 2,913 2,684 5,010 229 7,866 3,484 3,347 - = 3 8,299 ( (56) (191) 8,055 31,342 7,163 231 1.643 9,040 23,717 $ Under Armour, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except share data) December 31, 2019 December 31, 2018 $ 557.403 652,546 1,019,498 364,183 2,593,628 788,072 708,714 892,258 313,165 2,702,209 792,146 591,931 550, 176 36,345 82,379 88,341 4,843,531 548,494 41,793 112,420 123,819 4.245,022 $ $ Assets Current assets Cash and cash equivalents S Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property and equipment, net Operating lease right-of-use assets Goodwill Intangible assets, net Deferred income taxes Other long term assets Total assets S Llabilities and Stockholders' Equity Current liabilities Accounts payable S Accrued expenses Customer refund liabilities Operating lease liabilities Current maturities of long term debt Other current liabilities Total current liabilities Long term debt, net of current maturities Operating lease liabilities, non-current Other long term liabilities Total abilities Commitments and contingencies (see Note B) Stockholders' equity Class A Common Stock, 30.0003 1/3 par value: 400,000,000 shares authorized as of December 31, 2019 and 2018: 168,289.890 shares issued and outstanding as of December 31, 2019, and 187,710,319 shares issued and outstanding as of December 31, 2018. Class B Convertible Common Stock. S0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of December 31, 2019 and 2018 Class Common Stock S0.0003 1/3 par value: 400,000,000 shares authorized as of December 31, 2019 and 2018: 229,027,730 shares issued and outstanding as of December 31, 2019, and 226,421,963 shares issued and outstanding as of December 31, 2018, Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity Total abilities and stockholders' equity 618,194 374,694 219,424 125.900 560,884 340,415 301.421 25,000 88,257 1,315,977 703,834 83,797 1,422,009 592.687 580,635 98,113 2,693,444 208,340 2,228,151 62 62 11 11 76 75 973,717 1,226,986 (50,765) 2,150,087 4,843,531 916,628 1,139,082 (38,987) ) 2,016,871 4,245,022 18. Unaudited Quarterly Financial Data|| Quarter Ended (unaudited) Year Ended December 31, (In thousands) March 31, June 30, September 30, December 31, 2019 $ $ $ Net revenues Gross profit Income (loss) from operations Net income (loss) Basic net income (loss) per share of Class A, B and C common stock Diluted net income (loss) per share of Class A, B and C common stock 1,204,722 544,787 35,259 22,477 1,191,729 554,321 (11,482) (17,349) 1,429,456 689,898 138,920 102,315 1,441,225 681,527 74,073 (15,304) 5,267,132 2,470,533 236,770 92,139 0.05 (0.04) 0.23 (0.03) 0.20 $ 0.05 (0.04) $ 0.23 (0.03) $ 0.20 2018 $ $ $ Net revenues Gross profit Income (loss) from operations Net income (loss) Basic net income (loss) per share of Class A, B and C common stock Diluted net income (loss) per share of Class A, B and C common 1,185,370 523,453 (28,661) (30,242) 1,174,859 526,584 (104,875) (95,544) 1,442,976 665,207 118,966 75,266 1,389,980 625,227 (10,447) 4,218 5,193,185 2,340,471 (25,017) (46,302) $ (0.07 (0.21 0.17 0.01 $ (0.10) stock $ (0.07) (0.21) $ 0.17 0.01 $ (0.10) 1. How much inventory does Nike hold as of May 31, 2020? $7,367 2. Estimate the amount of merchandise that Nike purchased during the year that ended May 31, 2020 (Hint: Use the cost of goods sold equation). $21,162 3. What method does Under Armour use to determine the cost of its inventory? 4. Compute the Inventory Turnover ratio (cost of goods sold from the income statement divided by average inventory) for both Nike and Under Armor for the most recent fiscal year displayed. Show your work and report the ratios in the below table. Discuss in a 2-3 complete sentences, what you can infer from the difference. Nike Under Armour 5. Compute the Days in Inventory for Under Armor and Nike for the most recent fiscal year displayed. Discuss in a few sentences, what you can infer from the difference. Nike Under Armour FISCAL 2020 FISCAL 2019 CHANGE CURCING CURRENCY FISCAL 2018 S CHANGE $ 23.30 BAN Daars m. NIKE, Inc. Ravenna NIKE Brand Revenues Apparel suomar Total NIKE Brand Revenues Converse TOTAL MIKE, INC. REVENUES kanel Mike Brand Revenue Details Sales to Wholesale Customer Sales through NIKE Direct TOTAL NIKE BRAND REVENUES NIKE Brand Revenues on a Wholesale Equivalent Basis:11 fromax WHOLESALE EQUIVAT De Olive NIKE Brand Wholesale Equivalent Revenues by:11) $ $ 2 999 $ 35.568 19 23.156 obce $ $ ESBE $ d TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES NIKE Brand Wholesale Equivalent Revenuss by:1) Rahang Jordan Brand Footbaloocan Sportswear OTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES NIKE, INC. CONSOLIDATED BALANCE SHEETS MAY 31, 2020 2019 $ 4,466 197 8,348 $ 439 2,749 7,367 1.653 20,556 4,272 5,622 1,968 16,525 4,744 4,866 3,097 274 223 283 154 2.011 23,717 2,326 $ 31,342 $ $ 3 $ 249 9 in Millions) ASSETS Current assets: Cash and equivalents Short-term investments Accounts receivable, net Inventorles Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Operating lease right-of-use assets, net Identifiable intangible assets, net Goodwill Deferred income taxes and other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt Notes payable Accounts payable Current portion of operating lease liabilities Accrued liabilities Income taxes payable Total current liabilities Long-term debet Operating lease liabilities Deferred income taxes and other liabilities Commitments and contingencies (Note 18) Redeemable preferred stock Shareholders' equity: Common stack at stated value: : Class A convertible - 315 and 315 shares outstanding Class B - 1,243 and 1,253 shares outstanding Capital in excess of stated value Accumulated other comprehensive income (loss) Retained earnings (deficit) Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,612 2,248 445 5,184 156 8,284 9,406 2,913 2,684 5,010 229 7,866 3,484 3,347 - = 3 8,299 ( (56) (191) 8,055 31,342 7,163 231 1.643 9,040 23,717 $ Under Armour, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except share data) December 31, 2019 December 31, 2018 $ 557.403 652,546 1,019,498 364,183 2,593,628 788,072 708,714 892,258 313,165 2,702,209 792,146 591,931 550, 176 36,345 82,379 88,341 4,843,531 548,494 41,793 112,420 123,819 4.245,022 $ $ Assets Current assets Cash and cash equivalents S Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property and equipment, net Operating lease right-of-use assets Goodwill Intangible assets, net Deferred income taxes Other long term assets Total assets S Llabilities and Stockholders' Equity Current liabilities Accounts payable S Accrued expenses Customer refund liabilities Operating lease liabilities Current maturities of long term debt Other current liabilities Total current liabilities Long term debt, net of current maturities Operating lease liabilities, non-current Other long term liabilities Total abilities Commitments and contingencies (see Note B) Stockholders' equity Class A Common Stock, 30.0003 1/3 par value: 400,000,000 shares authorized as of December 31, 2019 and 2018: 168,289.890 shares issued and outstanding as of December 31, 2019, and 187,710,319 shares issued and outstanding as of December 31, 2018. Class B Convertible Common Stock. S0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of December 31, 2019 and 2018 Class Common Stock S0.0003 1/3 par value: 400,000,000 shares authorized as of December 31, 2019 and 2018: 229,027,730 shares issued and outstanding as of December 31, 2019, and 226,421,963 shares issued and outstanding as of December 31, 2018, Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity Total abilities and stockholders' equity 618,194 374,694 219,424 125.900 560,884 340,415 301.421 25,000 88,257 1,315,977 703,834 83,797 1,422,009 592.687 580,635 98,113 2,693,444 208,340 2,228,151 62 62 11 11 76 75 973,717 1,226,986 (50,765) 2,150,087 4,843,531 916,628 1,139,082 (38,987) ) 2,016,871 4,245,022 18. Unaudited Quarterly Financial Data|| Quarter Ended (unaudited) Year Ended December 31, (In thousands) March 31, June 30, September 30, December 31, 2019 $ $ $ Net revenues Gross profit Income (loss) from operations Net income (loss) Basic net income (loss) per share of Class A, B and C common stock Diluted net income (loss) per share of Class A, B and C common stock 1,204,722 544,787 35,259 22,477 1,191,729 554,321 (11,482) (17,349) 1,429,456 689,898 138,920 102,315 1,441,225 681,527 74,073 (15,304) 5,267,132 2,470,533 236,770 92,139 0.05 (0.04) 0.23 (0.03) 0.20 $ 0.05 (0.04) $ 0.23 (0.03) $ 0.20 2018 $ $ $ Net revenues Gross profit Income (loss) from operations Net income (loss) Basic net income (loss) per share of Class A, B and C common stock Diluted net income (loss) per share of Class A, B and C common 1,185,370 523,453 (28,661) (30,242) 1,174,859 526,584 (104,875) (95,544) 1,442,976 665,207 118,966 75,266 1,389,980 625,227 (10,447) 4,218 5,193,185 2,340,471 (25,017) (46,302) $ (0.07 (0.21 0.17 0.01 $ (0.10) stock $ (0.07) (0.21) $ 0.17 0.01 $ (0.10)