Financial Statement Analysis

The financial statements for Nike, Inc., are available in Appendix E. The following additional information is available (in thousands):

Accounts receivable at May 31, 2013: $3,117 Inventories at May 31, 2013: 3,484 Total assets at May 31, 2013: 17,545 Stockholders equity at May 31, 2013: 11,081

1. Determine the following measures for the fiscal years ended May 31, 2015, and May 31, 2014. Do not round interim calculations. Round the working capital amount in part (a) to the nearest dollar. Round all other final answers to one decimal place. When required, use the rounded final answers in subsequent computations.

			Fiscal Year 2015		Fiscal Year 2014
a.	Working capital (in millions)	$		$
b.	Current ratio
c.	Quick ratio
d.	Accounts receivable turnover
e.	Number of days' sales in receivables		days		days
f.	Inventory turnover
g.	Number of days' sales in inventory		days		days
h.	Ratio of liabilities to stockholders' equity
i.	Asset turnover
j.	Return on total assets, assuming interest expense is $28 million for the year ending May 31, 2015, and $24 million for the year ending May 31, 2014		%		%
k.	Return on common stockholders' equity		%		%
l.	Price-earnings ratio, assuming that the market price was $101.67 per share on May 29, 2015, and $76.91 per share on May 30, 2014
m.	Percentage relationship of net income to sales		%		%

2. The working capital increased between 2014 and 2015. The current and quick ratios both decreased during 2015. The accounts receivable turnover increased and number of days sales in receivables decreased slightly. The margin of protection to creditors remained constant . The return on total assets increased during 2015. The return on common stockholders equity increased .The percent of net income to sales increased during 2015.

Preview File Edit View Go Tools Window Help 64% 0 Sun 12:16 PM Q E nike_finanacial statement.pdf (page 1 of 2) Da nike_finanacial statement.pdf NIKE, Inc. Consolidated Statements of Income Year Ended May 31, 2014 2015 2013 30,601 $ 16,534 14,067 3.213 6,679 9,892 27.799 $ 15,353 12,446 3,031 5,735 8,766 25,313 14,279 11,034 2,745 5,051 7,796 (3) 33 (15) In milions, except per share data Income from continuing operations: Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest expense Income), net (Notes 6, 7 and 8) Other (income) expense, net (Note 17) Income before income taxes Income tax expense (Note ) NET INCOME FROM CONTINUING OPERATIONS NET INCOME FROM DISCONTINUED OPERATIONS NET INCOME Eamings per common share from continuing operations: Basic (Notes 1 and 12) Diluted (Notes 1 and 12) Eamings per common share from discontinued operations: Basic (Notes 1 and 12) Diluted (Notes 1 and 12) Dividends declared per common share (58) 4,205 932 3,273 103 3,544 851 2,693 3,256 805 2,451 21 2,472 3.273 $ 2,693 $ 3.80 3.70 $ $ 3.05 2.07 $ $ 2.74 2.68 0.02 0.02 - 0.99 $ $ $ 1.08 0.81 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement NIKE, Inc. Consolidated Statements of Comprehensive Income Exnert Answer A Ready E B - + 100% Preview File Edit View Go Tools Window Help 64% Sun 12:16 PM Q E nike_finanacial statement.pdf (page 1 of 2) Da | Q Search nike_finanacial statement.pdf The accompanying Notes to the Consolidated Financial Statements are an integral part of the statement NIKE, Inc. Consolidated Statements of Comprehensive Income Year Ended May 31, 2015 2014 3,273 $ 2,693 $ 2013 2,472 An mans) Net income Other comprehensive income (loss), net of tax: Change in net foreign currency translation adjustmentit Change in net gains (losses) on cash flow hedges Change in net gains (losses) on othera Change in release of cumulative translation loss related to Umbro Total other comprehensive income (oss), net of tex TOTAL COMPREHENSIVE INCOME (20) 1.188 (161) 12 83 $ 1.161 4,434 $ (189) 2,504 $ 125 2,597 (1) Net of tax benefit fexpense of 80 million, 80 million and $(13) milion, respectively 2 Net of tax benefit opense of $(31) milion $18 million and $(22) milion, respectively 3) Net of tax beneft expense of million, 80 million and $1 milion respectively (4) Net of tax beneft (expense) of 80 million, 80 milion and $47 milion, respectively The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement Exnert Answer A Ready E - 100% Preview File Edit View Go Tools Window Help 64% 0 Sun 12:16 PM Q E nike_finanacial statement.pdf (page 2 of 2) Da nike_finanacial statement.pdf May 31, 2015 2014 $ 3,852 2.072 3.358 4,337 389 1.968 15,976 3,011 281 2,220 2.902 3,434 3,947 355 818 13,696 2,834 282 131 1,651 18,594 131 2.201 21,600 S $ 107 $ In milions ASSETS Current assets: Cash and equivalents (Note 6) Short-term investments (Note 6) Accounts receivable, net (Note 1) Inventories (Notes 1 and 2) Deferred income taxes (Note 9) Prepaid expenses and other current assets (Notes 6 and 17) Total current assets Property, plant and equipment, net (Note 3) Identifiable intangible assets, net (Note 4) Goodwill (Note 4) Deferred income taxes and other assets (Notes 6, 9 and 17) TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt (Note 8) Notes payable (Note 7) Accounts payable (Note 7) Accrued liabilities (Notes 5, 6 and 17) Income taxes payable (Note 9) Total current liabilities Long-term debt (Note 8) Deferred income taxes and other liabilities (Notes 6, 9, 13 and 17) Commitments and contingencies (Note 16) Redeemable preferred stock (Note 10) Shareholders' equity: Common stock at stated value (Note 11): Class A convertible - 178 and 178 shares outstanding Class B - 679 and 692 shares outstanding Capital in excess of stated value Accumulated other comprehensive income (Note 14) Retained earnings Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,131 3.951 167 1.930 2.491 432 5,027 1,199 1,544 6,334 1,079 1,480 5,865 6,773 1.246 4.685 12,707 21,600 4.871 10,824 18,594 $ Exnert Answer A Ready E EU - + 100% Preview File Edit View Go Tools Window Help 64% 0 Sun 12:16 PM Q E nike_finanacial statement.pdf (page 1 of 2) Da nike_finanacial statement.pdf NIKE, Inc. Consolidated Statements of Income Year Ended May 31, 2014 2015 2013 30,601 $ 16,534 14,067 3.213 6,679 9,892 27.799 $ 15,353 12,446 3,031 5,735 8,766 25,313 14,279 11,034 2,745 5,051 7,796 (3) 33 (15) In milions, except per share data Income from continuing operations: Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest expense Income), net (Notes 6, 7 and 8) Other (income) expense, net (Note 17) Income before income taxes Income tax expense (Note ) NET INCOME FROM CONTINUING OPERATIONS NET INCOME FROM DISCONTINUED OPERATIONS NET INCOME Eamings per common share from continuing operations: Basic (Notes 1 and 12) Diluted (Notes 1 and 12) Eamings per common share from discontinued operations: Basic (Notes 1 and 12) Diluted (Notes 1 and 12) Dividends declared per common share (58) 4,205 932 3,273 103 3,544 851 2,693 3,256 805 2,451 21 2,472 3.273 $ 2,693 $ 3.80 3.70 $ $ 3.05 2.07 $ $ 2.74 2.68 0.02 0.02 - 0.99 $ $ $ 1.08 0.81 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement NIKE, Inc. Consolidated Statements of Comprehensive Income Exnert Answer A Ready E B - + 100% Preview File Edit View Go Tools Window Help 64% Sun 12:16 PM Q E nike_finanacial statement.pdf (page 1 of 2) Da | Q Search nike_finanacial statement.pdf The accompanying Notes to the Consolidated Financial Statements are an integral part of the statement NIKE, Inc. Consolidated Statements of Comprehensive Income Year Ended May 31, 2015 2014 3,273 $ 2,693 $ 2013 2,472 An mans) Net income Other comprehensive income (loss), net of tax: Change in net foreign currency translation adjustmentit Change in net gains (losses) on cash flow hedges Change in net gains (losses) on othera Change in release of cumulative translation loss related to Umbro Total other comprehensive income (oss), net of tex TOTAL COMPREHENSIVE INCOME (20) 1.188 (161) 12 83 $ 1.161 4,434 $ (189) 2,504 $ 125 2,597 (1) Net of tax benefit fexpense of 80 million, 80 million and $(13) milion, respectively 2 Net of tax benefit opense of $(31) milion $18 million and $(22) milion, respectively 3) Net of tax beneft expense of million, 80 million and $1 milion respectively (4) Net of tax beneft (expense) of 80 million, 80 milion and $47 milion, respectively The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement Exnert Answer A Ready E - 100% Preview File Edit View Go Tools Window Help 64% 0 Sun 12:16 PM Q E nike_finanacial statement.pdf (page 2 of 2) Da nike_finanacial statement.pdf May 31, 2015 2014 $ 3,852 2.072 3.358 4,337 389 1.968 15,976 3,011 281 2,220 2.902 3,434 3,947 355 818 13,696 2,834 282 131 1,651 18,594 131 2.201 21,600 S $ 107 $ In milions ASSETS Current assets: Cash and equivalents (Note 6) Short-term investments (Note 6) Accounts receivable, net (Note 1) Inventories (Notes 1 and 2) Deferred income taxes (Note 9) Prepaid expenses and other current assets (Notes 6 and 17) Total current assets Property, plant and equipment, net (Note 3) Identifiable intangible assets, net (Note 4) Goodwill (Note 4) Deferred income taxes and other assets (Notes 6, 9 and 17) TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt (Note 8) Notes payable (Note 7) Accounts payable (Note 7) Accrued liabilities (Notes 5, 6 and 17) Income taxes payable (Note 9) Total current liabilities Long-term debt (Note 8) Deferred income taxes and other liabilities (Notes 6, 9, 13 and 17) Commitments and contingencies (Note 16) Redeemable preferred stock (Note 10) Shareholders' equity: Common stock at stated value (Note 11): Class A convertible - 178 and 178 shares outstanding Class B - 679 and 692 shares outstanding Capital in excess of stated value Accumulated other comprehensive income (Note 14) Retained earnings Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,131 3.951 167 1.930 2.491 432 5,027 1,199 1,544 6,334 1,079 1,480 5,865 6,773 1.246 4.685 12,707 21,600 4.871 10,824 18,594 $ Exnert Answer A Ready E EU - + 100%