In the textbook Appendix D, selected portions of NIKE's financial statements for the fiscal years 2015 and 2016 are provided. Using the information from D-4 and D-6, answer the following parts A and B. Round to 2 decimal places.
A. Assume that Total assets at the end of 2014 were $20,312. Then, calculate the Asset turnover for 2015 and 2016.
B. Is the change from 2015 to 2016 favorable or unfavorable? Explain your answer
+ Appendix D Selected Excerpts from Nike Inc., Form 10-K for the Fiscal Year Ended May 31, 2016 IKE, Inc. Consolidated Statements of Shareholders' Equity Capital in Accumulated Common Stock Excess Other Class A Class B of Stated Comprehensive Retained In millions except per share data Shares Amount Shares Amount Value Income Earnings Total Balance at May 31, 2013 356 $ 1,433 $ 3 $ 5,184 $ 274 $ 5,620 $ 11,081 Stock options exercised (1) 22 445 445 Conversion to Class B Common Stock 1 Repurchase of Class B Common Stock (73) (11) (2,617) (2,628) Dividends on common stock ($0.47 per share) (821) (821) Issuance of shares to employees 3 78 78 Stock-based compensation 177 177 Forfeiture of shares from employees (1) (8) (4) (12) Net income 2,693 2,693 Other comprehensive income (loss) (189) (189) Balance at May 31, 2014 355 $ - 1,385 S 3 $ 5,865 $ 85 $ 4,871 $ 10,824 Stock options exercised 27 639 639 Repurchase of Class B Common Stock (58) (9) (2.525) (2,534) Dividends on common stock (S0 54 per share) (931) (931) Issuance of shares to employees 3 92 92 Stock-based compensation 191 191 Forfeiture of shares from employees (5) (3) (8) Net income 3.273 3,273 Other comprehensive income (loss) 1 161 1.161 Balance at May 31, 2015 3665 1 2575 67735 1,246 $ 4,685 $ 12,707 Stock options exercised 22 680 680 Conversion to Class B Common Stock (2) 2 Repurchase of Class B Common Stock (55) (8) Dividends on common stock (50.62 (3.230) (3.238) per share) Issuance of shares to employees (1,053) (1,053) 115 115 Stock-based compensation 236 236 Forfeiture of shares from employees (10) Net income (21) 3.760 3.760 Other comprehensive income foss) (928) 1928) Balance at May 31, 2015 35 1 325 7865 4 1515 12.268 The accompanying to the Console Francements ang The Notes may be found on the companion website at CengageBrain.com + D-7 Appendix D Selected Excerpts from Nike Inc, Form 10-K for the Fiscal Year Ended May 31, 2016 NIKE, Inc. Consolidated Statements of Cash Flows Year Ended May 31, 2016 2015 2014 (In millions) Cash provided by operations: $ 3,760 $ 3.273 $ Net income 2,693 Income charges (credits) not affecting cash: 649 Depreciation 606 518 Deferred income taxes (80) (113) (11) 236 Stock-based compensation 191 177 13 Amortization and other 43 68 Net foreign currency adjustments 98 424 56 Changes in certain working capital components and other assets and liabilities: Decrease (increase) in accounts receivable 60 (216) (298) (Increase) in inventories (590) (621) (505) (Increase) in prepaid expenses and other current assets (161) (144) (210) (Decrease) increase in accounts payable, accrued liabilities and income taxes payable (889) 1.237 525 Cash provided by operations 3,096 4,680 3,013 Cash used by investing activities: Purchases of short-term investments (5,367) (4,936) (5,386) Maturities of short-term investments 2,924 3,655 3,932 Sales of short-term investments 2,386 2,216 1,126 Investments in reverse repurchase agreements 150 (150) Additions to property, plant and equipment (1,143) (963) (880) Disposals of property, plant and equipment 10 3 3 Decrease increase) in other assets, net of other liabilities 6 (2) Cash used by investing activities (1,034) (175) (1,207) Cash used by financing activities: Net proceeds from long-term debt issuance 981 Long-term debt payments, including current portion (106) (7) (60) (Decrease) increase in notes payable (67) (63) Payments on capital lease obligations (7) (19) (17) Proceeds from exercise of stock options and other stock issuances 507 514 383 Excess tax benefits from share-based payment arrangements 281 218 132 Repurchase of common stock (3,238) (2,534) (2,628) Dividends-common and preferred (1,022) (899) (799) Cash used by financing activities (2,671) (2.790) (2,914) Effect of exchange rate changes on cash and equivalents (105) (83) (9) Net (decrease) increase in cash and equivalents (714) 1,632 Cash and equivalents, beginning of year (1,117) CASH AND EQUIVALENTS, END OF YEAR 3,852 2,220 3,337 $ 3,138 3,852 $ Supplemental disclosure of cash flow information: 2.220 Cash paid during the year for Interest, net of capitalized interest S 70 $ Income taxes 53 $ 53 748 Non-cash additions to property, plant and equipment 1,262 856 Dividends declared and not paid 206 167 271 240 209 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 75 252 The Notes may be found on the companion website at CengageBrain.com adf x + v * file:///C:/Users/241/Documents/accounting%20201.pdf + DA 22409171 2 Appendix D Selected Excerpts from Nike Inc, Form 10K for the Fiscal Year Ended May 31, 2016 D-7 NIKE, Inc. Consolidated Statements of Cash Flows 2014 2003 518 (11) 177 08 58 (2981 (505) (210) 525 3,013 (5.380) 3.032 1.128 Year Ended May 31 (in millions) 2016 2015 Cash provided by operations: Net income $ 3.700 $ 3.273 S Income charges (credits) not affecting cash: Depreciation 840 008 Deferred income taxes (80) (113) Stock-based compensation 230 101 Amortization and other 13 43 Net foreign currency adjustments 98 424 Changes in certain working capital components and other assets and Babies Decrease increase) in accounts receivable 60 (218) (Increase) in inventories (590) (021) (Increase) in prepaid expenses and other current assets (181) (144 (Decrease) Increase in accounts payable, accrued abilities and income taxes payable (880) 1.237 Cash provided by operations 3,090 4.680 Cash used by investing activities Purchases of short-term investments (5.307) (4,930) Maturities of short-term investments 2.024 3.855 Sales of short-term investments 2.380 2.210 Investments in reverse repurchase agreements 150 (150) Additions to property, plant and equipment (1.143) (103) Disposals of property, plant and equipment 10 3 Decrease increase) in other assets, net of other liabilities 8 Cash used by investing activities (1.034) (175) Cash used by financing activities Net proceeds from long-term debt issuance Long-term debt payments, including current portion 231 (100) (7) (Decrease increase in notes payable (07) (83) Payments on capital lease obligations Proceeds (10) from exercise of stock options and other stock issuances 307 514 Excess tax benefits from share-based payment arrangements 281 218 Repurchase of common stock (3.235) (2.534) Dividends - common and preferred (1.0221 Cash used by financing activities (2.670 (2.7003 ct of exchange rate changes on cash and swivalents (105) (decrease increase in cash and events (893) (714 1.632 Cash and equivalents, beginning of year 3.852 CASH AND EQUIVALENTS END OF YEAR 2.220 $ 2130 $ 3,852 Supplemental disclosure of cash flow information S Cash paid during the year for Interest, net of capitalized interest 3 70 3 Income taxes 53 5 Non cash addition to property, plant and equipment 740 1.22 262 Dividends declared and not paid 200 271 240 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement The Notes may be found on the companion website at CengageBrain.com (830) 3 2) (1.207) - 1801 75 (17) 200 132 (2.628) (700) (2014) (809) 3,337 2.220 856 107 200 201.pdf x + V O file:///C:/Users/2441/Documents/accounting%20201.pdf * - o - + 2 ID AV 2214012171 h 027 Appendix D Selected Excerpts from Nike Inc., Form 10-K for the Fiscal Year Ended May 31, 2016 D-5 2014 2,693 NIKE, Inc. Consolidated Statements of Comprehensive Income Year Ended May 31, (In millions) 2016 2015 Net income $ 3,760 $ 3,273 $ Other comprehensive income (loss), net of tax Change in net foreign currency translation adjustment") (176) (20) Change in net gains (losses) on cash flow hedges) (757) 1.188 Change in net gains (losses) on other) 5 (7) Total other comprehensive income (loss), net of tax (928) 1.161 TOTAL COMPREHENSIVE INCOME $ 2,832 $ 4.434 $ (1) Net of tax benefit (expense) of $0 million, $0 million and $0 million, respectively (2) Net of tax benefit (expense) of $35 million, $(31) million and $18 million, respectively. (3) Net of tax benefit (expense) of $0 million, 50 million and S0 million, respectively The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement (32) (161) 4 (189) 2,504 The Notes may be found on the companion website at CengageBrain.com 01.pdf x + v file:///C:/Users/2AL1/Documents/accounting%20201.pdf fith D 21 A 121401 8171 O D-4 Appendix D Selected Excerpts from Nike Inc., Form 10-K for the Fiscal Year Ended May 31, 2016 NIKE, Inc. Consolidated Statements of Income 2014 27,799 15,353 12,446 3,031 5,735 Year Ended May 31, (In millions, except per share data) 2016 2015 Revenues $ 32,376 $ 30,601 $ Cost of sales 17.405 16.534 Gross profit 14,971 14,067 Demand creation expense 3278 3,213 Operating overhead expense 7,191 6,679 Total selling and administrative expense 10,469 9,892 Interest expense (income), net 19 28 Other (income) expense net (140) (58) Income before income taxes 4,623 4,205 Income tax expense 863 932 NET INCOME $ 3,760 $ 3,273 $ Earnings per common share: Basic $ 2.21 $ 1.90 $ Diluted $ 2.16 $ 1.85 $ Dividends declared per common share $ 0.62 $ 0.54 $ The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. 8,766 33 103 3,544 851 2,693 1.52 1.49 0.47 The Notes may be found on the companion website at CengageBrain.com
