• List the deferred tax assets that have been recorded on the Nike's financial statements in each of the last three fiscal years.
  • Explain how these items created the deferred tax assets.
• Explain how Nike might recover the benefit of these deferred tax assets in the future.
  • Describe the potential timing of this recovery.
• Identify Nike valuation allowance on its deferred tax assets, including any changes to this allowance in the past three fiscal years.
  • Explain what this valuation allowance and any changes to it indicates about the Nike's future earnings prospects.
• Identify the deferred tax liabilities that have been recorded on Nike's financial statements in each of the last three fiscal years.
  • Interpret how these items created the deferred tax liabilities.
• Explain under what circumstances this deferred tax liability may become payable and the potential timing of this payment.
• Identify any changes in accounting assumptions that impacted the deferred tax assets or deferred tax liabilities (e.g., changes to depreciation methods, changes in inventory methods, etc.).
• Calculate Nike's debt-to-equity ratio under the following conditions:
  • Classify deferred tax liabilities as debt.
  • Classify deferred tax liabilities as equity.
  • Exclude deferred tax liabilities from both debt and equity.
• Classify the deferred tax liabilities as debt or equity (or neither) for purposes of analyzing the company.
  • Provide justification for your decision.
• Compare Nike's provision for income taxes to the company's cash tax payments in each of the three fiscal years.
  • State at least three factors that might contribute to increased or decreased cash tax payments in the next fiscal year for Nike.