Analysis and Use of Financial Statements Project

NIKE Inc.

https://www.sec.gov/Archives/edgar/data/320187/000032018715000113/nke-5312015x10k.htm

This assignment requires financial ratio analysis on a publicly-traded company of your choosing. Do not select a bank, insurance company, financial institution, or public utility. I would also strongly suggest avoiding an automobile company. The project is due on the date indicated in your course timeline. Each student will be required to examine the chosen companys annual report and calculate the ratios listed below. Each student will calculate the ratios for the two most recent years from available annual reports.

Once you have performed an analysis of the financial statements, students will write up a report summarizing the findings. The report will include a brief introduction, synopsis of the companys business and current business situation, a summary of the students interpretation of teams analysis, and a conclusion. Written proof of how the ratios were calculated MUST be attached to the report. You must calculate the ratios yourself. Use the attached work page behind to show proof of your calculations of the ratios (show all numbers in the calculations not just the end result). The paper should be six (6) double-spaced, typed pages (not including the ratios and the ratio calculations). Roughly, the paper should have one page of introduction, four pages of analysis and interpretation, and one page of conclusion. The focus should be on the analysis and your interpretation.

The analysis of the financial ratios should include insights into the meanings behind the ratios. The ratios should tell a story about how the company is doing and its prospects for the future. You need to tell that story. Do not copy directly from the annual report. In order to make the ratios more meaningful, a benchmark company or industry average for each ratio should also be included. You must calculate the benchmark companys ratios as well. I do not need these calculations attached. The conclusion should provide insight into the financial future of the company. An investment recommendation should also be made in the conclusion.

The paper will be worth 100 points, the presentation will be worth 40 points, and the two progress checks will be worth 10 points.

Required ratios:

Liquidity Ratios and Asset Utilization ratios:

Current Ratio

Quick Ratio

Accounts receivable turnover

Inventory turnover

Average collection period

Total assets turnover

Fixed Asset turnover

Solvency & Leverage Ratios

Times interest earned

Debt-to-equity ratio

Debt to total assets

Fixed charge coverage

Profitability Ratios:

Profit margin ratio

Gross Margin ratio

Return on total assets

Return on common stockholders equity

Evidence of Ratio Calculations

Please show your calculations of the financial rations of your chosen company in the column labeled Your Company. You can calculate the ratios by hand or attached a sheet that clearly demonstrates how you calculated the ratio (i.e. X/Y = Z). The ratios you provide for your competitor or industry average do not need to be calculated (you can find these on various finance websites though you will most likely have to calculate some yourself). Please attached this sheet to the back of your written project.

Ratio	Your Company	Competitor/Industry Avg.
Current Ratio
Quick Ratio
A/R Turnover
Inventory Turnover
Average collection period
Total Assets Turnover
Fixed Asset turnover
Times-interest Earned Ratio
Debt-to-Equity Ratio
Fixed charge coverage
Profit Margin Ratio
Gross Margin Ratio
Return-on-Total Assets Ratio
Return-on-Common Stockholders Equity Ratio