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
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 $ $ (In millions, except per share data) Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest expense (income), net Other income) expense, net Income before income taxes Income tax expense NET INCOME 2016 32,376 17,405 14.971 3,278 7,191 10,469 19 (140) 4,623 863 3,760 Year Ended May 31, 2015 $ 30,601 16,534 14.067 3,213 6.679 9,892 28 (58) 4.205 932 $ 3,273 2014 27,799 15,353 12,446 3,031 5,735 8,766 33 103 3,544 851 2,693 $ Earnings per common share: Basic Diluted $ $ 2.21 2.16 $ $ 1.90 1.85 $ $ 1.52 1.49 0.47 Dividends declared per common share $ 0.62 $ 0.54 $ 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 D-6 Appendix D Selected Excerpts from Nike Inc., Form 10-K for the Fiscal Year Ended May 31, 2016 NIKE, Inc. Consolidated Balance Sheets 2015 $ 3,852 2,072 3,358 4,337 1,968 15,587 3,011 281 131 2,587 21,597 $ $ $ GA May 31, (In millions) 2016 ASSETS Current assets: Cash and equivalents $ 3,138 Short-term investments 2,319 Accounts receivable, net 3,241 Inventories 4,838 Prepaid expenses and other current assets 1,489 Total current assets 15,025 Property, plant and equipment, net 3,520 Identifiable intangible assets, net 281 Goodwill 131 Deferred income taxes and other assets 2,439 TOTAL ASSETS 21,396 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt 44 Notes payable Accounts payable 2,191 Accrued liabilities 3,037 Income taxes payable 85 Total current liabilities 5,358 Long-term debt 2,010 Deferred income taxes and other liabilities 1,770 Commitments and contingencies Redeemable preferred stock Shareholders' equity: Common stock at stated value: Class A convertible 353 and 355 shares outstanding Class B 1,329 and 1,357 shares outstanding 3 Capital in excess of stated value 7,786 Accumulated other comprehensive income 318 Retained earnings 4.151 Total shareholders' equity 12,258 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 21,396 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 1 107 74 2,131 3,949 71 6,332 1,079 1,479 3 6,773 1,246 4,685 12,707 21,597
