Following are income statements and balance sheets for Nike Inc.

NIKE INC.
Consolidated Income Statements
	May 31,	May 31,
For Year Ended ($ millions)	2019	2018
Revenues	$44,985	$41,857
Cost of sales	24,889	23,507
Gross profit	20,096	18,350
Demand creation expense	4,316	4,114
Operating overhead expense	10,291	9,124
Total selling and administrative expense	14,607	13,238
Interest expense (income), net	56	62
Other (income) expense, net	(90)	76
Income before income taxes	5,523	4,974
Income tax expense	888	2,751
Net income	$4,635	$2,223

NIKE INC.
Consolidated Balance Sheets
	May 31,	May 31,
$ millions	2019	2018
Current assets
Cash and equivalents	$5,135	$4,886
Short-term investments	227	1,145
Accounts receivable, net	4,913	4,023
Inventories	6,465	6,050
Prepaid expenses and other current assets	2,263	1,300
Total current assets	19,003	17,404
Property, plant and equipment, net	5,456	5,122
Identifiable intangible assets, net	325	328
Goodwill	177	177
Deferred income taxes and other assets	2,313	2,885
Total assets	$27,274	$25,916
Current liabilities
Current portion of long-term debt	$7	$7
Notes payable	10	386
Accounts payable	3,004	2,621
Accrued liabilities	5,762	3,759
Income taxes payable	263	173
Total current liabilities	9,046	6,946
Long-term debt	3,984	3,988
Deferred income taxes and other liabilities	3,849	3,698
Commitments and contingencies (Note 18)
Shareholders equity
Common stock at stated value:
Class A convertible315 and 329 shares outstanding	-	-
Class B1,253 and 1,272 shares outstanding	3	3
Capital in excess of stated value	8,237	7,342
Accumulated other comprehensive income (loss)	266	(106)
Retained earnings	1,889	4,045
Total shareholders equity	10,395	11,284
Total liabilities and shareholders equity	$27,274	$25,916

Required a. Compute net operating assets (NOA) and net nonoperating obligations (NNO) for 2019. The companys NNO is negative because cash exceeds debt. NOA: $Answer NNO: $Answer b. Compute net operating profit after tax (NOPAT) for 2019 assuming a federal and state statutory tax rate of 22%. Note: Round your answer to the nearest whole dollar. NOPAT: $Answer c. Use the parsimonious forecast method, as shown in the Analysis Insight box on page 14-5, to forecast sales, NOPAT, and NOA for 2020 through 2023 using the following assumptions.

Sales growth	8%
Net operating profit margin (NOPM)	2019 ratios rounded to three decimal places
Net operating asset turnover (NOAT), year-end	2019 ratios rounded to three decimal places

Forecast the terminal period value assuming a 2% terminal period growth and using the NOPM and NOAT assumptions above. Note: Round your final answers to the nearest whole dollar.

Nike (NKE)			Forecast Horizon
	Reported					Terminal
($ millions)	2019	2020	2021	2022	2023	Period
Sales	Answer	Answer	Answer	Answer	Answer	Answer
NOPAT	Answer	Answer	Answer	Answer	Answer	Answer
NOA	Answer	Answer	Answer	Answer	Answer	Answer

d. Estimate the value of a share of Nikes common stock using the residual operating income (ROPI) model as of May 31, 2019; assume a discount rate (WACC) of 6.8% and common shares outstanding of 1,682 million. Note: Round your final answer to two decimal places (for example, round $15.555 to $15.56). Stock price per share: $Answer e. Nikes stock closed at $86.70 on July 23, 2019, the date the Form 10-K was filed with the SEC. How does your valuation estimate compare with this closing price?