1.Two worksheets correspond to this assignment. One worksheet includes financial information for Nike and the other worksheet includes financial information for Caterpillar. Each worksheet includes the Balance Sheet and the Income Statement of the respective company. Below the Income Statement, you will find red and blue boxes. Calculate the companys Free Cash Flow for the most current year by completing the red color boxes in the worksheet. In addition, calculate the uses for each companys FCF by completing the blue boxes found below the FCF calculations.

When you have completed the worksheet for Nike and Caterpillar, write an analysis (one page per company) summarizing your results. In your analysis, interpret the meaning of each companys FCF value. Describe the breakdown of how each company used this FCF. Include all five categories. From this Usage indicate how each companys shareholders and debt holders were affected during 2016. For example, explain whether shareholders from each company contributed or received money from the company in 2016. Also, explain whether debt holders of each company contributed or received money from the company in 2016. Also indicate if either company used any of its free cash flow to purchase short term investments outside of the company. (30 points per company)

Calculate MVA in 2016 and 2015 for both companies. Did Nikes management create or destroy value for Nike between 2015 and 2016? Explain your answer. Did Caterpillars management create or destroy value for Caterpillar between 2015 and 2016? Explain your answer. (20 points per company)

Data Source is Morningstar.

Cite any additional sources you may use. Use APA style for in text citations and references.

NIKE (NKE) BALANCE SHEET Fiscal year ends in May. USD in millions except per share data 2012-05 2013-05 2014os 2015 os 2016 os Current assets Cash 2317 3337 3138 2220 3852 Cash and cash equivalents 2628 2922 2072 2319 Short-term investments 5965 5142 5924 5457 Total cash 3757 3117 3434 3358 3241 Receivables 3280 3434 3947 4337 4838 Inventories 3350 355 Deferred income taxes 274 802 818 1968 1489 Prepaid expenses 870 11531 13626 13696 15976 15025 Total current assets Property, plant and equipment 5244 5500 6220 6352 7038 Gross property, plant and equipment .3518 3341 Accumulated Depreciation 2279 2452 2834 3011 3520 Net property, plant and equipment 131 131 131 131 201 281 281 535 Intangible assets 919 993 1651 2201 Deferred income taxes 3934 6371 Total non-current assets 15465 17584 18594 21600 21396 Total assets Liabilities and stockholders' equity Current liabilities 178 174 181 45 157 Short-term debt 1588 1646 1930 2131 2191 245 244 2445 1572 1993 3375 1654 433 Other current liabilities 5358 3926 5027 6334 Total current liabilities Non-current liabilities 228 1210 1199 1079 2010 Long-term debt NIKE (NKE) BALANCE SHEET Fiscal year ends in May. USD in millions except per share data 2012-05 2013-05 2014os 2015 os 2016 os Current assets Cash 2317 3337 3138 2220 3852 Cash and cash equivalents 2628 2922 2072 2319 Short-term investments 5965 5142 5924 5457 Total cash 3757 3117 3434 3358 3241 Receivables 3280 3434 3947 4337 4838 Inventories 3350 355 Deferred income taxes 274 802 818 1968 1489 Prepaid expenses 870 11531 13626 13696 15976 15025 Total current assets Property, plant and equipment 5244 5500 6220 6352 7038 Gross property, plant and equipment .3518 3341 Accumulated Depreciation 2279 2452 2834 3011 3520 Net property, plant and equipment 131 131 131 131 201 281 281 535 Intangible assets 919 993 1651 2201 Deferred income taxes 3934 6371 Total non-current assets 15465 17584 18594 21600 21396 Total assets Liabilities and stockholders' equity Current liabilities 178 174 181 45 157 Short-term debt 1588 1646 1930 2131 2191 245 244 2445 1572 1993 3375 1654 433 Other current liabilities 5358 3926 5027 6334 Total current liabilities Non-current liabilities 228 1210 1199 1079 2010 Long-term debt