NIKE, Inc. Consolidated Statements of Income (In millions, except per share data) 2018 Year Ended May 31, 2017 34,350 2016 Revenues 36,397 $ 32,376 Cost of sales 19,038 17,405 20,441 15,956 14,971 Gross profit Demand creation expense Operating overhead expense 3,577 15,312 3,341 7.222 3,278 7,934 7,191 Total selling and administrative expense 11,511 10,469 10,563 59 Interest expense (income), net 54 19 Other expense (income), net 66 (196) (140) Income before income taxes 4,325 4,623 Income tax expense 2,392 4,886 646 4,240 863 NET INCOME 1,933 $ 3,760 Earnings per common share: Basic 1.19 A 2.56 2.51 $ $ 2.21 2.16 Diluted 1.17 $ A Dividends declared per common share 0.78 $ 0.70 $ 0.62 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. NIKE, Inc. Consolidated Balance Sheets May 31, 2018 4,249 S fin m ans) ASSETS Currensesele: Cash and equivalerils Short term inestments Accounts racavab , net Invertories Prepaid expenses and other current assets Total current aseels Property, plant and equipment, met Ident fiable intangible assets, re! Gondwil Deferred income taxes and other esgate TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current lilies: Current portion of long-term deb. Notes payable Accounts payable Accrued Abiles 3,808 2,371 2,677 5,055 1,150 18,061 3,889 3.499 5251 1,130 15,134 1.454 205 283 2509 22,536 $ $ 2,787 23,259 325 338 2279 3,0111 Income taxes payable 5,474 6,043 3,468 3.218 3.471 Total current liabilities Lorg-terir debt Deferred income taxes and other liabities Commitments and contingencies Nate 15) Redaarable preferred stock Shareholders' equity Common stock al slated value: Class A convertible-329 and 329 shares outstanding Class 31,272 and 1.314 shares outstanding Capital in excess of stated value Accumulated other comprehensive loes Retained earnings Total shareholders equity TOTAL LIABILMES AND SHAREHOLDERS' EQUITY The accompanying Notes to the Consolidated Frencial Statements are an integral part of this statement (92) 3,517 0812 22,536 5.710 (213) 8.CO7 12,407 23,259 $ Under Armour, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except share data) December 31, 2018 December 31, 2017 s $ 557,403 652,546 1,019,496 364,183 2,593,628 826.868 546,494 41,793 112,420 123,819 4,245,022 312,483 609,670 1,158,548 256,978 2.337,679 885,774 555,674 46,995 82,601 97,444 4,006,367 S $ Assets Current assets Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property and equipment, net Goodwill Intangible assets, net Deferred income taxes Other long term assets Total assets Liabilities and Stockholders' Equity Current liabilities Revolving credit facility, current Accounts payable Accrued expenses Customer refund liability Current maturities of long term debt Other current liabilities Total current liabilities Long term debt, net of current maturities Other long term liabilities Total liabilities Commitments and contingencies (see Note 7) Stockholders' equity Class A Common Stock, $0.0003 1/3 par value; 400,000,000 shares authorized as of December 31, 2018, and 2017: 187,710,319 shares issued and outstanding as of December 31, 2018, and 185,257,423 shares issued and outstanding as of December 31, 2017 Class B Convertible Common Slock, $0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of December 31, 2018 and 2017 Class C Common Stock, 50.0003 1/3 par value; 400,000,000 shares authorized as of December 31, 2018 and 2017; 226,421,963 shares issued and outstanding as of December 31, 2018, and 222,375,079 shares issued and outstanding as of December 31, 2017 125,000 561,108 296,841 560,884 340,415 301,421 25,000 88.257 1,315,977 703,834 208,340 2,228,151 27,000 50,426 1,060,375 765,046 162,304 1.987,725 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity Total liabilities and stockholders' equity 916,628 1,139,082 (38,987) 2,016,871 872,266 1,184,441 (38,211) 2,018,642 $ 4,245,022 4,006,367 Under Armour, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share amounts) Year Ended December 31, 2018 2017 2016 $ $ 4,833,338 2,584,724 2,248,614 1,631,143 Net revenues Cost of goods sold Gross profit Selling, general and administrative expenses Restructuring and impairment charges Income (loss) from operations Interest expense, nel Other expense, net Income (osa) before income taxes Income tax expense (benefit) Income from equity method investment Net income (loss) Adjustment payment to Class C capital stockholders Net income (loss) available to all stockholders 5,193,185 2,852,714 2,340,471 2,182,339 183,149 (25.017) (33,568) (9,203) (67.788) (20,552) 934 (46,302) 4,989,244 2,737,830 2,251,414 2,099,522 124,049 27,843 (34,538) (3,614) (10.309) 37,951 417,471 (26,434) (2,755) 388,282 131,303 (48,260) 256,979 59,000 197,979 (46,302) (48.260) S Basic net income (loss) per share of Class A and B common stock Basic net income (loss) per share of Class C common stock Diluted net income (loss) per share of Class A and B common stock Diluted net income (loss) per share of Class C common stock (0.10) (0.10) (0.10) (0.10) S $ S $ (0.11) (0.11) (0.11) (0.11) S $ S S 0.45 0.72 0.45 0.71 Weighted average common shares outstanding Class A and B common stock Basic Diluted 221,001 221,001 219,254 219,254 217,707 221,944 Weighted average common shares outstanding Class C common stock Basic Diluted 224,814 224,814 221,475 221,475 218,623 222,904 Provide your answers in one Word document (you can download this document and fill in accordingly). Required: 1. How much inventory does Under Armour hold as of December 31, 2018? 5,261,000 2. Estimate the amount of merchandise that Under Armour purchased during the year ended December 31, 2018 (Hint: Use the cost of goods sold equation). 3. What method does Under Armour use to determine the cost of its inventory? 4. Compute the Inventory Turnover ratio (cost of goods sold from the income statement divided by average inventory) for both Nike and Under Armor for the year ended in 2018. Show your work and report the ratios in the below table. Discuss in a 2-3 complete sentences, what you can infer from the difference. Nike Under Armour 5. Compute the Days in Inventory for Under Armor and Nike for the year ended in 2018. Discuss in a few sentences, what you can infer from the difference. Nike Under Armour nour