Continuing with your Week 2 Project, now your CEO after reviewing your earlier Week 2 PowerPoint submission has asked your team to complete an additional benchmark analysis task, before the upcoming Board Meeting.

For this part of the project your team needs to do an analysis of the market and operational characteristics of your company and its financial profile. For this project, your team will need to select four companies that are direct competitors of your company. This sample selection should be based on revenue, profitability, market capitalization, market segment and product characteristics.

This project is an additional benchmark data analytics project. The objective of this part of the project will be to do a comparative financial analysis of your company with the averages of the sample of four companies that will form your comparative group.

The project deliverables will be another PowerPoint presentation to the CEO explaining the financial performance of your company compared to the sample of four comparable companies. The analysis should include the following deliverables:

1. An explanation of the logic of the selection of the four comparable group companies. Why were these companies selected?

2.Your team?s data extraction strategy, process and methodology.

3. A financial comparison of your company to the average of the comparator group on the following financial factors.

a. Profitability

b. Debt Management

c. Liquidity

d. Asset Management

e. Value Creation ? based on a the 3-year trend in Free

Cash Flow

In order to complete this project, your team has to select which ratios you are going to use in each of the five categories given above. In addition to that, your team will have to briefly explain why you are selecting the ratios you are using in your benchmark study.

Then your team will have to collect the financial data for your company and the financial data of the four competitor companies. The data can be collected from two financial data bases such as, Yahoo Finance, Lexis Nexis, Plunkett, or bizstats.com. Your team will then have to collect and calculate the averages of the four competitor companies. (Please note that no ratiocalculations are required for each company, the ratios should be readily available on the websites noted above. You will only need to calculate the average ratios for the four companies combined.)

Nike Inc. and Industry Ratios Comparisons Sharaye Baugh John White Dupont Analysis Return On Asset Ratio The Return on asset ratio for Nike is which relatively lower than the Industry standard of . Therefore, Nike performance ratio is therefore relatively low in comparison to the industry standards. Ratio Type of Ratio ROA Performance Formula [Net Income/Total Assets] Nike Ratio 0.18 Industry Ratio 0.24 Return On Equity Ratio The Return On Equity for Nike is 0.31 which is higher compared to the industry standards of 0.28 indicating a better performance. Ratio Type of Ratio ROE Performance Formula Nike Ratio 0.31 [Net Income/Total Owners' Equity] Industry Ratio 0.28 Inventory Turn Over Ratio Its Inventory Turn Over rate for Nike is 3.80 which is also higher compared to the industry standards of 2.50 indicating a fair activity rate. Ratio Type of Ratio Formula Nike Ratio ITO Activity 3.80 [Cost of Goods Sold/Inventory] Industry Ratio 2.50 Debt to Equity Ratio The Debt to Equity Ratio for Nike is 0.75 compared to the industry standard of 0.92 indicating a better performance. Ratio Type of Ratio Formula Nike Ratio D to Equity Financing 0.75 [Total Liability/shareholders' Equity] Industry Ratio 0.92 Acid Test Ratio The Acid Test Ratio for Nike is 1.62, lower than the industry standard of 1.87 indicating a lower liquidity. Ratio Type of Ratio Formula Nike Ratio Industry Ratio A-Test Liquidity 1.62 1.87 [Cash + Acct. Rec. + short-Term Invest./Current Liabilities] Working Capital Ratio The Working Capital Ratio for Nike is 2.80 to the industry standards of 2.30 indicating a fairly good liquidity. Ratio Type of Ratio Formula Nike Ratio W-Cap Liquidity 2.80 [Current Assets/Current Liabilities] Industry Ratio 2.30 References Footwear in the US. (n.d.). Retrieved January 13, 2017, from http://www.euromonitor.com/footwear-in-the-us/report Parker, M. (2016, Jul. 21). NIKE, INC. ANNUAL REPORT ON FORM 10-K. NIKE, INC. Retrieved January 13, 2017, from https://www.sec.gov/Archives/edgar/data/320187/00003 2018716000336ke-5312016x10k.htm Symbol Lookup. (n.d.). Retrieved January 13, 2017, from http:// www.marketwatch.com/investing/stock/aaplxf/financials THE END Nike Inc. benchmark analysis selection of the four comparable group companies The athletic footwear, apparel, and equipment industry is becoming very highly competitive 4 competitors of Nike include Adidas, Under Armour, Deckers Outdoor Corp and Carter's Inc. The selection of the 4 group companies is based on revenue, the profitability, market capitalization. The biggest competitors of Nike are Adidas and Under Armour Based on the revenues the revenue of Adidas have grown from 10. 08 billion in the year 2006 to 18 billion in 2016. this shows that the revenue have positive growth. The company had a net of 991 million in the year 2015 selection of the four comparable group companies Under Amor is growing with a high rate having had revenues of 431 million in 2006, the company is made a revenue of 4,691 million in 2016. this is huge growth and the company continues to invade the market segments of Nike Under Armour growth can be mainly attributed to its active pursue of lucrative deals and sponsorships similar to those of Nike selection of the four comparable group companies Deckers Outdoor Corp D is another competitor contesting for the same market share with the Nike. The company has revenues of I billion as in 2016. the company demonstrates consistent good performance over the years. Carter's Inc. is another company that have maintained great performance when it comes to its revenues and profitability. The company has a revenue of 3014 in the year 2015 and a net income of 244 million. all these companies are contesting for the same market share with Nike and they are offering the same products as Nike with the almost the same charcteristics Team's data extraction strategy, process and methodology. The data extraction strategy used by the team includes collecting secondary data from various sources. The secondary sources utilized in this analysis include Yahoo Finance, Lexis Nexis and even nasal websites Through the secondary sources the team was able to analyze the information provided regarding the financials the 4 competitors. This paramount in helping the team gain insights regarding the competition facing Nike and to know where Nike stands as far as the industry is concerned . The team collected the information on the financial ratios of each of the competitors and calculated the industry averages. Ratios utilized The ratios utilized in this benchmark study includes the net margin ratios, the return on equity and the return on invested capital. These profitability rations are good indicators of how well a company is utilizing the resources to generate profits. The current ratio, quick ratio and the cash ratio were utilized since they are very important in gauging whether a company can be able to meet the short term obligations as they fall due Ratios utilized Other ratios utilized includes the total debt to equity ratio, the debt to asset ratio and the long-term debt to equity ratios. These ratio are utilized because they help to indicate the whether a firm is able to manage debts appropriately and to indicate whether a firm may become insolvent. analysis Nikes ratios current ratio 3.62 quick ratio 2.59 cash ratio 1.84 Operating margin ratio 13.37% Net margin 11.61% Return on assets 17.49% Return on equity 30.22% Return on capital invested 24.73% Analysis against the industry averages From the industry averages its clear that Nike is performing much better than the industry averages. First the liquidity ratios clearly demonstrates that the company has the a better liquidity than the average in the industry. This is because the industry average is of the current , cash and quick ratio is at 3.03, 1.71 and 0.765 respectively. On the other hand the Nike has a current ratio of 3.62 a quick ratio of 2.59 and a cash ratio of 1.89 Analysis against the industry averages From the profitability ratios its clear that Nike is preforming better than the industry averages. For example, average industry operating margin is at 9.49% while the operating margin ratio for Nike is at 13.37%.a The net margin of Nike is also higher than the industry average. Nike has a net margin of 11.61% while the industry average is at 5.87%. Nike has also been able to utilize and manage its assets to produce higher returns than industry averages. Analysis against the industry averages The returns on equity for Nike is also way higher than the industry average. The industry average is at 17.66% while that on Nike is at 301.22%. Also the return on capital invested of Nike is higher than the industry averages. Analysis Under Armour Deckers Carter's industry Outdoor Corp Inc. average Ratios Total debt to equity ratio longterm debt to equity 32.44 40.1 10.35 12.12% 20.75% 25.93 37.58 3.37 5.52% 16.73% total debt to assets 13.78 23.32 7.83 9.61% 11.26% Nike ratios Total debt to equity ratio 16.76 long-term debt to equity 16.4 total debt to assets 9.48 Analysis against the industry averages The debt analysis still shows that Nike have managed its debts better than the competitors. The firm has lower debt levels the industry averages for the debts are bigger than those of Nike. This shows that the company still have a favorable financial position than the competitors in the industry Conclusion Nike Inc. is performing much better than the competitors in the industry. Its not therefore possible to benchmark the company's performance with any of its competitors or even with the industry averages. Benchmarking can only be made against higher preforming institutions. Nike has to ensure that it make its own targets to ensure that it continues growing. References Footwear in the US. (n.d.). Retrieved January 13, 2017, from http://www.euromonitor.com/footwear-inthe-us/report Parker, M. (2016, Jul. 21). NIKE, INC. ANNUAL REPORT ON FORM 10-K. NIKE, INC. Retrieved January 13, 2017, from https://www.sec.gov/Archives/edgar/data/320187/000 032018716000336ke-5312016x10k.htm Symbol Lookup. (n.d.). Retrieved January 13, 2017, from http://www.marketwatch.com/investing/stock/aaplxf/fi nancials Nike Inc. benchmark analysis selection of the four comparable group companies The athletic footwear, apparel, and equipment industry is becoming very highly competitive 4 competitors of Nike include Adidas, Under Armour, Deckers Outdoor Corp and Carter's Inc. The selection of the 4 group companies is based on revenue, the profitability, market capitalization. The biggest competitors of Nike are Adidas and Under Armour Based on the revenues the revenue of Adidas have grown from 10. 08 billion in the year 2006 to 18 billion in 2016. this shows that the revenue have positive growth. The company had a net of 991 million in the year 2015 selection of the four comparable group companies Under Amor is growing with a high rate having had revenues of 431 million in 2006, the company is made a revenue of 4,691 million in 2016. this is huge growth and the company continues to invade the market segments of Nike Under Armour growth can be mainly attributed to its active pursue of lucrative deals and sponsorships similar to those of Nike selection of the four comparable group companies Deckers Outdoor Corp D is another competitor contesting for the same market share with the Nike. The company has revenues of I billion as in 2016. the company demonstrates consistent good performance over the years. Carter's Inc. is another company that have maintained great performance when it comes to its revenues and profitability. The company has a revenue of 3014 in the year 2015 and a net income of 244 million. all these companies are contesting for the same market share with Nike and they are offering the same products as Nike with the almost the same charcteristics Team's data extraction strategy, process and methodology. The data extraction strategy used by the team includes collecting secondary data from various sources. The secondary sources utilized in this analysis include Yahoo Finance, Lexis Nexis and even nasal websites Through the secondary sources the team was able to analyze the information provided regarding the financials the 4 competitors. This paramount in helping the team gain insights regarding the competition facing Nike and to know where Nike stands as far as the industry is concerned . The team collected the information on the financial ratios of each of the competitors and calculated the industry averages. Ratios utilized The ratios utilized in this benchmark study includes the net margin ratios, the return on equity and the return on invested capital. These profitability rations are good indicators of how well a company is utilizing the resources to generate profits. The current ratio, quick ratio and the cash ratio were utilized since they are very important in gauging whether a company can be able to meet the short term obligations as they fall due Ratios utilized Other ratios utilized includes the total debt to equity ratio, the debt to asset ratio and the long-term debt to equity ratios. These ratio are utilized because they help to indicate the whether a firm is able to manage debts appropriately and to indicate whether a firm may become insolvent. analysis Nikes ratios current ratio 3.62 quick ratio 2.59 cash ratio 1.84 Operating margin ratio 13.37% Net margin 11.61% Return on assets 17.49% Return on equity 30.22% Return on capital invested 24.73% Analysis against the industry averages From the industry averages its clear that Nike is performing much better than the industry averages. First the liquidity ratios clearly demonstrates that the company has the a better liquidity than the average in the industry. This is because the industry average is of the current , cash and quick ratio is at 3.03, 1.71 and 0.765 respectively. On the other hand the Nike has a current ratio of 3.62 a quick ratio of 2.59 and a cash ratio of 1.89 Analysis against the industry averages From the profitability ratios its clear that Nike is preforming better than the industry averages. For example, average industry operating margin is at 9.49% while the operating margin ratio for Nike is at 13.37%.a The net margin of Nike is also higher than the industry average. Nike has a net margin of 11.61% while the industry average is at 5.87%. Nike has also been able to utilize and manage its assets to produce higher returns than industry averages. Analysis against the industry averages The returns on equity for Nike is also way higher than the industry average. The industry average is at 17.66% while that on Nike is at 301.22%. Also the return on capital invested of Nike is higher than the industry averages. Analysis Under Armour Deckers Carter's industry Outdoor Corp Inc. average Ratios Total debt to equity ratio longterm debt to equity 32.44 40.1 10.35 12.12% 20.75% 25.93 37.58 3.37 5.52% 16.73% total debt to assets 13.78 23.32 7.83 9.61% 11.26% Nike ratios Total debt to equity ratio 16.76 long-term debt to equity 16.4 total debt to assets 9.48 Analysis against the industry averages The debt analysis still shows that Nike have managed its debts better than the competitors. The firm has lower debt levels the industry averages for the debts are bigger than those of Nike. This shows that the company still have a favorable financial position than the competitors in the industry Conclusion Nike Inc. is performing much better than the competitors in the industry. Its not therefore possible to benchmark the company's performance with any of its competitors or even with the industry averages. Benchmarking can only be made against higher preforming institutions. Nike has to ensure that it make its own targets to ensure that it continues growing. References Footwear in the US. (n.d.). Retrieved January 13, 2017, from http://www.euromonitor.com/footwear-inthe-us/report Parker, M. (2016, Jul. 21). NIKE, INC. ANNUAL REPORT ON FORM 10-K. NIKE, INC. Retrieved January 13, 2017, from https://www.sec.gov/Archives/edgar/data/320187/000 032018716000336ke-5312016x10k.htm Symbol Lookup. (n.d.). Retrieved January 13, 2017, from http://www.marketwatch.com/investing/stock/aaplxf/fi nancials