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Please help me solve this case Chapter 6 (page 299) Part 1: Financial Statement Analysis Case Financial Statement Analysis Case 1: Liquidity, Solvency, and DuPont
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Chapter 6 (page 299) Part 1: Financial Statement Analysis Case Financial Statement Analysis Case 1: Liquidity, Solvency, and DuPont Analysis of Nike Use Nike's, Inc.'s balance sheet and other information provided on the next page to answer the following questions. a. Compute Nike's working capital in 2019 and 2018. b. Compute Nike's current ratio in 2019 and 2018. Comment on what the working capital and current ratio indicate about Nike in 2019 and 2018. d. Compute Nike's debt-to-equity ratio for 2019 and 2018. Comment on what the debt-to-equity ratio indicates about Nike in 2019 and 2018. e. Use DuPont analysis to decompose Nike's return on equity into return on assets and financial leverage. Nike's net income in 2019 was $4,029 million. Comment on the effect of financial leverage on return on equity. c. Nike, Inc. CONSOLIDATED BALANCE SHEETS 2019 2018 (in millions) ASSETS Current Assets Cash and cash equivalents $ 4,466 $ 4,249 Accounts receivable, net 4,272 3.498 Inventories 5,622 5.261 Other current assets 2,165 2.126 Total Current Assets 16,525 15,134 Property and Equipment-net 4,744 4,454 Deferred Taxes 2,011 2,509 Goodwill 154 154 Other Intangible Assets-net 283 285 Total Assets $23,717 $22,536 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $ 2,612 $ 2,279 Accrued and other liabilities 5,010 3.269 Income taxes payable 229 150 Current portion of long-term debt and notes payable 15 Total Current Liabilities 7,866 6,040 Long-Term Debt 3,464 3,468 Other Liabilities 3,347 3,216 Total Liabilities 14,667 12,724 Total Shareholders' Equity 9,040 9,812 $23,717 $22,536 Total Liabilities and Shareholders' Equity Note: Certain amounts on the balance sheet have been combined for presentation Source: https://www.sec.gov/Archives/edgar/data/320187/000032018719000051/0000320187-19-000051-index.htm 342 Chapter 6 (page 299) Part 1: Financial Statement Analysis Case Financial Statement Analysis Case 1: Liquidity, Solvency, and DuPont Analysis of Nike Use Nike's, Inc.'s balance sheet and other information provided on the next page to answer the following questions. a. Compute Nike's working capital in 2019 and 2018. b. Compute Nike's current ratio in 2019 and 2018. Comment on what the working capital and current ratio indicate about Nike in 2019 and 2018. d. Compute Nike's debt-to-equity ratio for 2019 and 2018. Comment on what the debt-to-equity ratio indicates about Nike in 2019 and 2018. e. Use DuPont analysis to decompose Nike's return on equity into return on assets and financial leverage. Nike's net income in 2019 was $4,029 million. Comment on the effect of financial leverage on return on equity. c. Nike, Inc. CONSOLIDATED BALANCE SHEETS 2019 2018 (in millions) ASSETS Current Assets Cash and cash equivalents $ 4,466 $ 4,249 Accounts receivable, net 4,272 3.498 Inventories 5,622 5.261 Other current assets 2,165 2.126 Total Current Assets 16,525 15,134 Property and Equipment-net 4,744 4,454 Deferred Taxes 2,011 2,509 Goodwill 154 154 Other Intangible Assets-net 283 285 Total Assets $23,717 $22,536 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $ 2,612 $ 2,279 Accrued and other liabilities 5,010 3.269 Income taxes payable 229 150 Current portion of long-term debt and notes payable 15 Total Current Liabilities 7,866 6,040 Long-Term Debt 3,464 3,468 Other Liabilities 3,347 3,216 Total Liabilities 14,667 12,724 Total Shareholders' Equity 9,040 9,812 $23,717 $22,536 Total Liabilities and Shareholders' Equity Note: Certain amounts on the balance sheet have been combined for presentation Source: https://www.sec.gov/Archives/edgar/data/320187/000032018719000051/0000320187-19-000051-index.htm 342 Step by Step Solution
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