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 2014 27,799 15,353 12,446 3,031 5,735 8,766 33 (58) 4,205 932 3,273 103 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 NIKE, Inc. Consolidated Statements of Shareholders' Equity Retained Earnings Total $ 5,620 $ 11,081 445 (1) (2.617) (2,628) (821) (821) 78 177 (4) (12) 2,693 2.693 (189) 4.871 $ 10.824 639 $ Capital in Accumulated Common Stock Excess Other Class A Class B of Stated Comprehensive (In millions, except per share data) Shares Amount Shares Amount Value Income Balance at May 31, 2013 356 $ - 1,433 $ 3 $ 5,184 $ 274 Stock options exercised 445 Conversion to Class B Common Stock Repurchase of Class B Common Stock (11) Dividends on common stock ($0.47 per share) Issuance of shares to employees 78 Stock-based compensation 177 Forfeiture of shares from employees Net income Other comprehensive income (loss) (189) Balance at May 31, 2014 355 $ - 1,385 $ 3 $ 5.865 $ 85 Stock options exercised 639 Repurchase of Class B Common Stock Dividends on common stock ($0.54 per share) Issuance of shares to employees Stock-based compensation Forfeiture of shares from employees Net income Other comprehensive income (loss) Balance at May 31, 2015 Stock options exercised 680 Conversion to Class B Common Stock (2) - 2 - Repurchase of Class B Common Stock (55) (8) Dividends on common stock ($0.62 per share) Issuance of shares to employees 115 Stock-based compensation 236 Forfeiture of shares from employees (10) Net income Other comprehensive income (loss) (928) Balance at May 31, 2016 353 $ - 1,329 $ 3 7 ,786 $ 318 (2,525) (931) (2,534) (931) 92 191 1.161 365 $ - 1,357 $ 3 1,296 5 4,685 $ 12,707 680 (3.230) (3,238) (1,053) (1,053) 115 236 (11) 3.760 (21) 3,760 (928) $ 4,151 $ 12,258 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 NIKE, Inc. Consolidated Balance Sheets 2015 3,852 2,072 3,358 4,337 1,968 15,587 3,011 281 131 2,587 21,597 107 - 74 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 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. 2,131 3,949 71 6,332 1,079 1,479 6,773 1,246 4,685 12,707 21,597 The Notes may be found on the companion website at CengageBrain.com NIKE, Inc. Consolidated Statements of Comprehensive Income $ 2014 2,693 (32) (161) 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 (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, $0 million and $0 million, respectively. The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. $ (189) 2,504 The Notes may be found on the companion website at CengageBrain.com NIKE, Inc. Consolidated Statements of Cash Flows 2014 2,693 518 (11) 177 68 (298) (505) (210) 525 3,013 (5,386) 3,932 1,126 (880) Year Ended May 31, (in millions) 2016 2015 Cash provided by operations: Net income 3,760 $ 3.273 $ Income charges (credits) not affecting cash: Depreciation 649 606 Deferred income taxes (80) (113) Stock-based compensation 236 191 Amortization and other 43 Net foreign currency adjustments 424 Changes in certain working capital components and other assets and liabilities: Decrease increase) in accounts receivable 60 (216) (Increase) in inventories (590) (621) (Increase) in prepaid expenses and other current assets (161) (Decrease) increase in accounts payable, accrued liabilities and income taxes payable (889) 1,237 Cash provided by operations 3.096 4,680 Cash used by investing activities: Purchases of short-term investments (5,367) (4,936) Maturities of short-term investments 2,924 3,655 Sales of short-term investments 2.386 2.216 Investments in reverse repurchase agreements 150 (150) Additions to property, plant and equipment (1.143) (963) Disposals of property, plant and equipment Decrease increase) in other assets, net of other liabilities Cash used by investing activities (1,034) (175) Cash used by financing activities: Net proceeds from long-term debt issuance 981 Long-term debt payments, including current portion (106) (7) (Decrease) increase in notes payable (67) (63) Payments on capital lease obligations (7) (19) Proceeds from exercise of stock options and other stock issuances 507 514 Excess tax benefits from share-based payment arrangements 281 218 Repurchase of common stock (3.238) (2,534) Dividends - common and preferred (1.022) (899) Cash used by financing activities (2,790) Effect of exchange rate changes on cash and equivalents (105) (83) Net (decrease) increase in cash and equivalents (714) 1.632 Cash and equivalents, beginning of year 3.852 2.220 CASH AND EQUIVALENTS, END OF YEAR 3,138 $ 3.852 S Supplemental disclosure of cash flow information: Cash paid during the year for: Interest, net of capitalized interest 70 $ 53 $ Income taxes 748 1,262 Non-cash additions to property, plant and equipment 206 Dividends declared and not paid 240 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. 10 (2) (1,207) (60) 75 (17) 383 132 (2,628) (799) (2,914) 19) (1,117) 3,337 2.220 (2.671) 252 53 856 167 209 271 The Notes may be found on the companion website at CengageBrain.com NOW.2 Online teachin x + akeAssignment/take Assignment Main.doFinvokertakeAssignmentSession Locator Bonprogress=false Financial Statement Analysis The financial statements for Nike, Inc., are presented in Appendix D. Use the following additional information (in thousands): Accounts receivable at May 31, 2014: $3,117 Inventories at May 31, 2014: 3,947 Total assets at May 31, 2014: 18,594 Stockholders' equity at May 31, 2014: 12,000 1. Determine the following measures for the fiscal years ended May 31, 2016, and May 31, 2015. Do not found interim calculation Round the working capital amount in part (a) to the nearest dollar. Round all other final answers to one decimal place. When required, use the rounded final answers in subsequent computations. May 31, 2016 May 31, 2015 a. Working capital (in millions) 9,667 b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days' sales in receivables days Inventory turnover Q. Number of days' sales in Inventory h. Ratio of abilities to stockholders' equity Asset turnover 1 Return on total assets 30 days Previous Check My Work 2 more Check My Works remaining All work saved Save and Submit Assignment for Grading - 11:31 AM days X SH X ENBEGEE X d. Accounts receivable turnover e. Number of days' sales in receivables f. Inventory turnover 9. Number of days' sales in inventory h. Ratio of liabilities to stockholders' equity i. Asset turnover Return on total assets k. Return on common stockholders' equity 30.12 x 25.52 % Price-earnings ratio, assuming that the market price was $54.90 per 24.84 27.79 x share on May 29, 2016, and $52.81 per share on May 30, 2015. m. Percentage relationship of net income to sales 11.61 xs 2. The working capital increased between 2015 and 2016. The current and quick ratios both increased during 2016. The accounts receivable turnover increased and number of days' sales in receivables decreased slightly. The margin of protection to creditors decreased X The return on total assets increased during 2016. The return on common stockholders' equity increased the percent of net income to sales increased during 2016. X X Check My World Partially correct Check My Work 2 more Check My Work uses remaining Previous All work saved. Save and Exit Submit Ansignment for Grading 11:32 AM 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 2014 27,799 15,353 12,446 3,031 5,735 8,766 33 (58) 4,205 932 3,273 103 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 NIKE, Inc. Consolidated Statements of Shareholders' Equity Retained Earnings Total $ 5,620 $ 11,081 445 (1) (2.617) (2,628) (821) (821) 78 177 (4) (12) 2,693 2.693 (189) 4.871 $ 10.824 639 $ Capital in Accumulated Common Stock Excess Other Class A Class B of Stated Comprehensive (In millions, except per share data) Shares Amount Shares Amount Value Income Balance at May 31, 2013 356 $ - 1,433 $ 3 $ 5,184 $ 274 Stock options exercised 445 Conversion to Class B Common Stock Repurchase of Class B Common Stock (11) Dividends on common stock ($0.47 per share) Issuance of shares to employees 78 Stock-based compensation 177 Forfeiture of shares from employees Net income Other comprehensive income (loss) (189) Balance at May 31, 2014 355 $ - 1,385 $ 3 $ 5.865 $ 85 Stock options exercised 639 Repurchase of Class B Common Stock Dividends on common stock ($0.54 per share) Issuance of shares to employees Stock-based compensation Forfeiture of shares from employees Net income Other comprehensive income (loss) Balance at May 31, 2015 Stock options exercised 680 Conversion to Class B Common Stock (2) - 2 - Repurchase of Class B Common Stock (55) (8) Dividends on common stock ($0.62 per share) Issuance of shares to employees 115 Stock-based compensation 236 Forfeiture of shares from employees (10) Net income Other comprehensive income (loss) (928) Balance at May 31, 2016 353 $ - 1,329 $ 3 7 ,786 $ 318 (2,525) (931) (2,534) (931) 92 191 1.161 365 $ - 1,357 $ 3 1,296 5 4,685 $ 12,707 680 (3.230) (3,238) (1,053) (1,053) 115 236 (11) 3.760 (21) 3,760 (928) $ 4,151 $ 12,258 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 NIKE, Inc. Consolidated Balance Sheets 2015 3,852 2,072 3,358 4,337 1,968 15,587 3,011 281 131 2,587 21,597 107 - 74 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 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. 2,131 3,949 71 6,332 1,079 1,479 6,773 1,246 4,685 12,707 21,597 The Notes may be found on the companion website at CengageBrain.com NIKE, Inc. Consolidated Statements of Comprehensive Income $ 2014 2,693 (32) (161) 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 (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, $0 million and $0 million, respectively. The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. $ (189) 2,504 The Notes may be found on the companion website at CengageBrain.com NIKE, Inc. Consolidated Statements of Cash Flows 2014 2,693 518 (11) 177 68 (298) (505) (210) 525 3,013 (5,386) 3,932 1,126 (880) Year Ended May 31, (in millions) 2016 2015 Cash provided by operations: Net income 3,760 $ 3.273 $ Income charges (credits) not affecting cash: Depreciation 649 606 Deferred income taxes (80) (113) Stock-based compensation 236 191 Amortization and other 43 Net foreign currency adjustments 424 Changes in certain working capital components and other assets and liabilities: Decrease increase) in accounts receivable 60 (216) (Increase) in inventories (590) (621) (Increase) in prepaid expenses and other current assets (161) (Decrease) increase in accounts payable, accrued liabilities and income taxes payable (889) 1,237 Cash provided by operations 3.096 4,680 Cash used by investing activities: Purchases of short-term investments (5,367) (4,936) Maturities of short-term investments 2,924 3,655 Sales of short-term investments 2.386 2.216 Investments in reverse repurchase agreements 150 (150) Additions to property, plant and equipment (1.143) (963) Disposals of property, plant and equipment Decrease increase) in other assets, net of other liabilities Cash used by investing activities (1,034) (175) Cash used by financing activities: Net proceeds from long-term debt issuance 981 Long-term debt payments, including current portion (106) (7) (Decrease) increase in notes payable (67) (63) Payments on capital lease obligations (7) (19) Proceeds from exercise of stock options and other stock issuances 507 514 Excess tax benefits from share-based payment arrangements 281 218 Repurchase of common stock (3.238) (2,534) Dividends - common and preferred (1.022) (899) Cash used by financing activities (2,790) Effect of exchange rate changes on cash and equivalents (105) (83) Net (decrease) increase in cash and equivalents (714) 1.632 Cash and equivalents, beginning of year 3.852 2.220 CASH AND EQUIVALENTS, END OF YEAR 3,138 $ 3.852 S Supplemental disclosure of cash flow information: Cash paid during the year for: Interest, net of capitalized interest 70 $ 53 $ Income taxes 748 1,262 Non-cash additions to property, plant and equipment 206 Dividends declared and not paid 240 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. 10 (2) (1,207) (60) 75 (17) 383 132 (2,628) (799) (2,914) 19) (1,117) 3,337 2.220 (2.671) 252 53 856 167 209 271 The Notes may be found on the companion website at CengageBrain.com NOW.2 Online teachin x + akeAssignment/take Assignment Main.doFinvokertakeAssignmentSession Locator Bonprogress=false Financial Statement Analysis The financial statements for Nike, Inc., are presented in Appendix D. Use the following additional information (in thousands): Accounts receivable at May 31, 2014: $3,117 Inventories at May 31, 2014: 3,947 Total assets at May 31, 2014: 18,594 Stockholders' equity at May 31, 2014: 12,000 1. Determine the following measures for the fiscal years ended May 31, 2016, and May 31, 2015. Do not found interim calculation Round the working capital amount in part (a) to the nearest dollar. Round all other final answers to one decimal place. When required, use the rounded final answers in subsequent computations. May 31, 2016 May 31, 2015 a. Working capital (in millions) 9,667 b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days' sales in receivables days Inventory turnover Q. Number of days' sales in Inventory h. Ratio of abilities to stockholders' equity Asset turnover 1 Return on total assets 30 days Previous Check My Work 2 more Check My Works remaining All work saved Save and Submit Assignment for Grading - 11:31 AM days X SH X ENBEGEE X d. Accounts receivable turnover e. Number of days' sales in receivables f. Inventory turnover 9. Number of days' sales in inventory h. Ratio of liabilities to stockholders' equity i. Asset turnover Return on total assets k. Return on common stockholders' equity 30.12 x 25.52 % Price-earnings ratio, assuming that the market price was $54.90 per 24.84 27.79 x share on May 29, 2016, and $52.81 per share on May 30, 2015. m. Percentage relationship of net income to sales 11.61 xs 2. The working capital increased between 2015 and 2016. The current and quick ratios both increased during 2016. The accounts receivable turnover increased and number of days' sales in receivables decreased slightly. The margin of protection to creditors decreased X The return on total assets increased during 2016. The return on common stockholders' equity increased the percent of net income to sales increased during 2016. X X Check My World Partially correct Check My Work 2 more Check My Work uses remaining Previous All work saved. Save and Exit Submit Ansignment for Grading 11:32 AM
