f. Was Nike in a position to pay its short-term obligations at May 31, 1995? (Hint: what was Nike's current ratio at May 31, 19957) Did Nike have positive working capital? 8. Were Nike's operations a source or a use of cash in fiscal 1995? h. What were Nike's major sources and uses of cash in fiscal 1995? - 15- NIKE, INC. CONSOLIDATED BALANCE SHEET (In Thousands) May 31 1995 1994 $ 216,071 $ 518,816 Assets Current Assets: Cash and equivalents Accounts receivable, less allowance for doubtful accounts of $ 32, 663 and $ 28, 291 Inventories (Note 2) Deferred income taxes (Note 6) Prepaid expenses 1,053,237 629,742 72,657 - 74.221 703,682 470,023 37,603 40.307 Total current assets 2,045,928 1,770,431 Property, plant and equipment, net (Notes 3 and 5) Goodwill (Note 1) other assets 554,879 495,907 46.031 405,845 163,036 34.503 $3, 142,745 $2,373,815 $ s 31,943 397, 100 297,656 345,224 35612 3,857 127,378 210,576 181,889 38.287 Liabilities and shareholders' Equity Current Liabilities: Current portion of long-term debt (Note 5) Notes payable (Note 4) Accounts payable (Note 4) Accrued liabilities Income taxes payable Total current liabilities Long-term debt (Notes 5 and 13) Non-current deferred income taxes (Note 6) Other non-current liabilities (Mote 1) Commitments and contingencies (Notes 11 an 14) 1,107,535 561,987 10,565 17,789 41, 867 12,364 18,228 39,987 Redeemable Preferred Stock (Note 7) 300 300 155 159 Shareholders' equity (Note 8) Common stock at stated value: class A convertible-25,895 and 26,679 abares outstanding Class 45,550 and 46,521 shares outstanding Capital in excess of stated value Foreign currency translation adjustment Retained earnings 2, 698 122,436 1,585 1.837.815 2,704 108,284 (15,123) 1.644.925 1.740 $3,142 745 $2.373, 815 The accompanying notes to consolidated financial statements are an integral part of this statement - 16- NIKE, INC. CONSOLIDATED STATEMENT OF INCOME Year Ended May 31 1995 1994 1993 $4,760,834 $3,789,568 $3,930,984 (In Thousands, Except Per Share Data) Reveres Costs and expenses: Cost of sales Selling and administrative Interest (Notes 3, 4 and 5) Other (income) /expense, net (Notes 1, 9 and 10) 2,865,280 1,209,760 24,208 2,301,423 974,099 15,282 2,386,993 922,261 25,739 11.722 8.270 1.475 4.110.920 3.299074 3.336.468 Income before income taxes 649,864 490,594 594,516 Income taxes (Note 6) 250.200 191.800 229.500 Net income $ 399,664 $ 298,794 S 365, 016 Net income per common share (Note 1) $ 5.44 $ 3.96 $ 4.74 Average mamber of common and common equivalent shares (Rote 1) 73,503 75,456 77,063 The accompanying notes to consolidated financial statements are an integral part of this statement - 17 NIKE, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended May 31 (In Thousands) 1995 1994 1993 $ 399,664 $ 298,794 $365,016 71,113 64,531 60,393 (24,668) (1,359) 19, 125 (23,876) (3,588) 8,067 4,310 19,847 12,951 Cash Provided (Used) by Operations: Net income Income charges (credita) not affecting cash Depreciation Deferred income taxes and purchased tax benefits Other non-current liabilities Other, including amortization changes in certain working capital components: (Increase) decrease in inventory (Increase) decrease in accounts receivable (Increase) decrease in other current asseta Increase (decrease) in accounts payable, accrued liabilities and income taxes payable Cash provided by operations (69,676) 160,823 (97,471) (301, 648) 23,97 (62,538) (10,276) 6,888 (5,133) 72.639 0845 (32.083) 254,913 576,463 265,292 (95,266) (97,041) 12,650 5,006 Cash Provided (Used) by Investing Activities Additions to property, plant and equipment (154,125) Disposals of property, plant and equipment 9,011 Acquisition of subsidiaries: Identifiable intangible assets & Goodwill (345,901) Net assets acquired (B4, 119) Additions to other non-current assets -16.260) Cash used by Investing activities (581,394) (2,185) (1,367) 15.4502 152,003) (25,858) (3.036) (91,618) (172,932) 6,044 1,536 Cash Provided (Used) by Financing Activities: Additions to long-term debt 2,971 Reductions in long-term debt including current portion (39,804) Increase (Decrease) in notes payable 263,874 Proceeds from exercise of options 6,154 Repurchase of stock (142,919) Dividends-common and preferred 165.418 Cash provided/ (used) by financing activities 24,858 Effect of exchange rate changes on cash (1,122) (56,986) (2,939) 4,288 (140,104) (60.282) (5,817) (2,017) 7,055 4153.0171 (249,979) (52,260) (7,334) 8,866 (302,745) 519.916 227,532 291,284 31,234 260.050 Net increase in cash and equivalents Cash and equivalents, beginning of year Cash and equivalents, end of year $ 216,071 $ 518,816 $ 291 284 - 18- f. Was Nike in a position to pay its short-term obligations at May 31, 1995? (Hint: what was Nike's current ratio at May 31, 19957) Did Nike have positive working capital? 8. Were Nike's operations a source or a use of cash in fiscal 1995? h. What were Nike's major sources and uses of cash in fiscal 1995? - 15- NIKE, INC. CONSOLIDATED BALANCE SHEET (In Thousands) May 31 1995 1994 $ 216,071 $ 518,816 Assets Current Assets: Cash and equivalents Accounts receivable, less allowance for doubtful accounts of $ 32, 663 and $ 28, 291 Inventories (Note 2) Deferred income taxes (Note 6) Prepaid expenses 1,053,237 629,742 72,657 - 74.221 703,682 470,023 37,603 40.307 Total current assets 2,045,928 1,770,431 Property, plant and equipment, net (Notes 3 and 5) Goodwill (Note 1) other assets 554,879 495,907 46.031 405,845 163,036 34.503 $3, 142,745 $2,373,815 $ s 31,943 397, 100 297,656 345,224 35612 3,857 127,378 210,576 181,889 38.287 Liabilities and shareholders' Equity Current Liabilities: Current portion of long-term debt (Note 5) Notes payable (Note 4) Accounts payable (Note 4) Accrued liabilities Income taxes payable Total current liabilities Long-term debt (Notes 5 and 13) Non-current deferred income taxes (Note 6) Other non-current liabilities (Mote 1) Commitments and contingencies (Notes 11 an 14) 1,107,535 561,987 10,565 17,789 41, 867 12,364 18,228 39,987 Redeemable Preferred Stock (Note 7) 300 300 155 159 Shareholders' equity (Note 8) Common stock at stated value: class A convertible-25,895 and 26,679 abares outstanding Class 45,550 and 46,521 shares outstanding Capital in excess of stated value Foreign currency translation adjustment Retained earnings 2, 698 122,436 1,585 1.837.815 2,704 108,284 (15,123) 1.644.925 1.740 $3,142 745 $2.373, 815 The accompanying notes to consolidated financial statements are an integral part of this statement - 16- NIKE, INC. CONSOLIDATED STATEMENT OF INCOME Year Ended May 31 1995 1994 1993 $4,760,834 $3,789,568 $3,930,984 (In Thousands, Except Per Share Data) Reveres Costs and expenses: Cost of sales Selling and administrative Interest (Notes 3, 4 and 5) Other (income) /expense, net (Notes 1, 9 and 10) 2,865,280 1,209,760 24,208 2,301,423 974,099 15,282 2,386,993 922,261 25,739 11.722 8.270 1.475 4.110.920 3.299074 3.336.468 Income before income taxes 649,864 490,594 594,516 Income taxes (Note 6) 250.200 191.800 229.500 Net income $ 399,664 $ 298,794 S 365, 016 Net income per common share (Note 1) $ 5.44 $ 3.96 $ 4.74 Average mamber of common and common equivalent shares (Rote 1) 73,503 75,456 77,063 The accompanying notes to consolidated financial statements are an integral part of this statement - 17 NIKE, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended May 31 (In Thousands) 1995 1994 1993 $ 399,664 $ 298,794 $365,016 71,113 64,531 60,393 (24,668) (1,359) 19, 125 (23,876) (3,588) 8,067 4,310 19,847 12,951 Cash Provided (Used) by Operations: Net income Income charges (credita) not affecting cash Depreciation Deferred income taxes and purchased tax benefits Other non-current liabilities Other, including amortization changes in certain working capital components: (Increase) decrease in inventory (Increase) decrease in accounts receivable (Increase) decrease in other current asseta Increase (decrease) in accounts payable, accrued liabilities and income taxes payable Cash provided by operations (69,676) 160,823 (97,471) (301, 648) 23,97 (62,538) (10,276) 6,888 (5,133) 72.639 0845 (32.083) 254,913 576,463 265,292 (95,266) (97,041) 12,650 5,006 Cash Provided (Used) by Investing Activities Additions to property, plant and equipment (154,125) Disposals of property, plant and equipment 9,011 Acquisition of subsidiaries: Identifiable intangible assets & Goodwill (345,901) Net assets acquired (B4, 119) Additions to other non-current assets -16.260) Cash used by Investing activities (581,394) (2,185) (1,367) 15.4502 152,003) (25,858) (3.036) (91,618) (172,932) 6,044 1,536 Cash Provided (Used) by Financing Activities: Additions to long-term debt 2,971 Reductions in long-term debt including current portion (39,804) Increase (Decrease) in notes payable 263,874 Proceeds from exercise of options 6,154 Repurchase of stock (142,919) Dividends-common and preferred 165.418 Cash provided/ (used) by financing activities 24,858 Effect of exchange rate changes on cash (1,122) (56,986) (2,939) 4,288 (140,104) (60.282) (5,817) (2,017) 7,055 4153.0171 (249,979) (52,260) (7,334) 8,866 (302,745) 519.916 227,532 291,284 31,234 260.050 Net increase in cash and equivalents Cash and equivalents, beginning of year Cash and equivalents, end of year $ 216,071 $ 518,816 $ 291 284 - 18