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Following are income statements and balance sheets for Nike Inc. NIKE INC. Consolidated Income Statements May 31, May 31, For Year Ended ($ millions) 2019

Following are income statements and balance sheets for Nike Inc.

NIKE INC.
Consolidated Income Statements
May 31,May 31,
For Year Ended ($ millions)20192018
Revenues$39,117$36,397
Cost of sales21,64320,441
Gross profit17,47415,956
Demand creation expense3,7533,577
Operating overhead expense8,9497,934
Total selling and administrative expense12,70211,511
Interest expense (income), net4954
Other (income) expense, net(78)66
Income before income taxes4,8014,325
Income tax expense7722,392
Net income$4,029$1,933


NIKE INC.
Consolidated Balance Sheets
May 31,May 31,
$ millions20192018
Current assets
Cash and equivalents$4,466$4,249
Short-term investments197996
Accounts receivable, net4,2723,498
Inventories5,6225,261
Prepaid expenses and other current assets1,9681,130
Total current assets16,52515,134
Property, plant and equipment, net4,7444,454
Identifiable intangible assets, net283285
Goodwill154154
Deferred income taxes and other assets2,0112,509
Total assets$23,717$22,536
Current liabilities
Current portion of long-term debt$6$6
Notes payable9336
Accounts payable2,6122,279
Accrued liabilities5,0103,269
Income taxes payable229150
Total current liabilities7,8666,040
Long-term debt3,4643,468
Deferred income taxes and other liabilities3,3473,216
Commitments and contingencies (Note 18)
Shareholders’ equity
Common stock at stated value:
Class A convertible—315 and 329 shares outstanding--
Class B—1,253 and 1,272 shares outstanding33
Capital in excess of stated value7,1636,384
Accumulated other comprehensive income (loss)231(92)
Retained earnings1,6433,517
Total shareholders’ equity9,0409,812
Total liabilities and shareholders’ equity$23,717$22,536


Required
c. Use the parsimonious forecast method, as shown in the Analysis Insight box on page 13-4, to forecast sales, NOPAT, and NOA for 2020 through 2023 using the following assumptions.

Sales growth8%
Net operating profit margin (NOPM)2019 ratios rounded to three decimal places
Net operating asset turnover (NOAT), year-end2019 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 answers to the nearest whole dollar.

Nike (NKE)
Forecast Horizon
ReportedTerminal
($ millions)20192020202120222023Period
SalesAnswer

39,117

Answer

42,246

Answer

45,626

Answer

49,276

Answer

53,218

Answer

54,283

NOPATAnswer

4,006

Answer

Answer

Answer

Answer

Answer

NOAAnswer

7,856

Answer

Answer

Answer

Answer

Answer


d. Estimate the value of a share of Nike’s common stock using the discounted cash flow (DCF) 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: Insert Answer

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