Information from the balance sheet, income statement, and statement of cash flows for Nike follows. Refer to these financial statements to answer the requirements. NIKE,
Information from the balance sheet, income statement, and statement of cash flows for Nike follows. Refer to these financial statements to answer the requirements.
NIKE, INC. Consolidated Statements of Income | |||
---|---|---|---|
Year Ended December 31 (In millions) | 2019 | 2018 | |
Revenues | $39,117 | $36,397 | |
Cost of sales | 21,643 | 20,441 | |
Gross profit | 17,474 | 15,956 | |
Demand creation expense | 3,753 | 3,577 | |
Operating overhead expense | 8,949 | 7,934 | |
Total selling and administrative expense | 12,702 | 11,511 | |
Interest expense (income), net | 49 | 54 | |
Other (income) expense, net | (78) | 66 | |
Income before income taxes | 4,801 | 4,325 | |
Income tax expense | 772 | 2,392 | |
Net income | $ 4,029 | $ 1,933 |
Consolidated Balance Sheets | ||
---|---|---|
May 31 (in millions) | 2019 | 2018 |
Current Assets | ||
Cash and cash equivalents | $ 4,466 | $ 4,249 |
Short-term investments | 197 | 996 |
Accounts receivable, net. | 4,272 | 3,498 |
Inventories | 5,622 | 5,261 |
Prepaid expenses and other current assets | 1,968 | 1,130 |
Total current assets | 16,525 | 15,134 |
Property, plant and equipment, net | 4,744 | 4,454 |
Identifiable intangible assets, net | 283 | 285 |
Goodwill | 154 | 154 |
Deferred income taxes | 2,011 | 2,509 |
Total assets | $23,717 | $22,536 |
Liabilities and stockholders' equity | ||
Current Liabilities | ||
Current portion of long-term debt | $6 | $6 |
Notes payable | 9 | 336 |
Accounts payable | 2,612 | 2,279 |
Accrued pension liabilities | 5,010 | 3,269 |
Income taxes payable | 229 | 150 |
Total current liabilities | 7,866 | 6,040 |
Long-term debt | 3,464 | 3,468 |
Deferred income taxes and other liabilities | 3,347 | 3,216 |
Shareholders equity | ||
Class A convertible315 and 329 shares outstanding | -- | -- |
Class B1,253 and 1,272 shares outstanding | 3 | 3 |
Capital in excess of stated value | 7,163 | 6,384 |
Accumulated other comprehensive income (loss) | 231 | (92) |
Retained earnings | 1,643 | 3,517 |
Total shareholders equity | 9,040 | 9,812 |
Total liabilities and stockholders' equity | $23,717 | $22,536 |
Consolidated Statement of Cash Flows | |||
---|---|---|---|
Year Ended May 31 (in millions) | 2019 | 2018 | |
Cash provided by operations: | |||
Net income | $4,029 | $1,933 | |
Adjustments to reconcile net income to net cash provided by operations: | |||
Depreciation | 705 | 747 | |
Deferred income taxes | 34 | 647 | |
Stock-based compensation | 325 | 218 | |
Amortization and other | 15 | 27 | |
Net foreign currency adjustments | 233 | (99) | |
Changes in certain working capital components and other assets and liabilities: | |||
(Increase) decrease in accounts receivable | (270) | 187 | |
(Increase) decrease in inventories | (490) | (255) | |
(Increase) decrease in prepaid expenses and other current and non-current assets | (203) | 35 | |
Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities | 1,525 | 1,515 | |
Cash provided by operations | 5,903 | 4,955 | |
Cash provided (used) by investing activities: | |||
Purchases of short-term investments | (2,937) | (4,783) | |
Maturities of short-term investments | 1,715 | 3,613 | |
Sales of short-term investments | 2,072 | 2,496 | |
Additions to property, plant and equipment | (1,119) | (1,028) | |
Disposals of property, plant and equipment | 5 | 3 | |
Other investing activities. | -- | (25) | |
Cash provided (used) by investing activities | (264) | 276 | |
Cash used by financing activities: | |||
Long-term debt payments, including current portion | (6) | (6) | |
Increase (decrease) in notes payable | (325) | 13 | |
Payments on capital lease and other financing obligations | (27) | (23) | |
Proceeds from exercise of stock options and other stock issuances | 700 | 733 | |
Repurchase of common stock | (4,286) | (4,254) | |
Dividendscommon and preferred | (1,332) | (1,243) | |
Tax payments for net share settlement of equity awards | (17) | (55) | |
Cash used by financing activities | (5,293) | (4,835) | |
Effect of exchange rate changes on cash and equivalents | (129) | 45 | |
Net increase (decrease) in cash and equivalents | 217 | 441 | |
Cash and equivalents, beginning of year | 4,249 | 3,808 | |
Cash and equivalents, end of year | $4,466 | $4,249 |
(c) Compute times interest earned ratio, cash from operations to total debt ratio, and free operating cash flow to total debt ratios. Financial statements included the following footnote: Included in Interest expense (income), net was interest income related to the Companys investment portfolio of $82 million and $70 million for the years ended May 31, 2019 and 2018, respectively.
Note: Round answers to two decimal places.
2019 times interest earned = Answer
2018 times interest earned = Answer
2019 cash from operations to total debt = Answer
2018 cash from operations to total debt = Answer
2019 free operating cash flow to total debt = Answer
2018 free operating cash flow to total debt = Answer
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