Question 11

At the most recent balance sheet date, Nike's largest current asset is:

	a.	Inventories.
	b.	Cash.
	c.	Accounts receivable (net).
	d.	Accounts payable.

Question 12

Which of Nike's balance sheet accounts represents future cash outflows for expenses already incurred?

	a.	Accounts receivable.
	b.	Accounts payable.
	c.	Current portion of long-term debt.
	d.	Accrued liabilities.

Question 13

At the most recent balance date, the amount of cash that Nike expected to collect from its customers for credit sales was (in millions):

	a.	$4,463
	b.	$4,423
	c.	$4,667.
	d.	$28,213

Question 14

Nike's cost of inventory sold during the recent reporting period was (in millions):

	a.	$14,804
	b.	$21,479
	c.	$25,231
	d.	$46,710

Question 15

At the most recent balance sheet date, Nike's current liabilities were more than its non-current liabilities.

	a.	True.
	b.	False.

NIKE, INC. CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF INCOME The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. NIKE, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY NIKE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS STOCK-BASED COMPENSATION The Company accounts for stock-based compensation by estimating the fair value, net of estimated forfeitures, of equity awards and recognizing the related expense as Cost of sales or Operating overhead expense, as applicable, in the Consolidated Statements of Income on a straight-line basis over the vesting period. Substantially all awards vest ratably over four years of continued employment, with stock options expiring 10 years from the date of grant. Performance-based restricted stock units vest based on the Company's achievement of certain performance criteria throughout the three-year performance period and continued employment through the vesting date. The fair value of options, stock appreciation rights and employees' purchase rights under the employee stock purchase plans (ESPPs) is determined using the Black-Scholes option pricing model. The fair value of restricted stock and time-vesting restricted stock units is established by the market price on the date of grant. The fair value of performance-based restricted stock units is estimated as of the grant date using a Monte Carlo simulation. Refer to Note 11 - Common Stock and Stock-Based Compensation for additional information on the Company's stock-based compensation programs. INCOME TAXES The Company accounts for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance to reduce deferred tax assets to the amount management believes is more likely than not to be realized. Realization of deferred tax assets is dependent on future taxable eamings and is therefore uncertain. At least quarterly, the Company assesses taxable income in prior carryback periods, the scheduled reversal of deferred tax liabilities, projected future taxable income and avallable tax planning strategies. The Company uses forecasts of taxable income and considers foreign tax credit utilization in making this assessment of realization, which are inherently uncertain and can result in significant variation between estimated and actual results. To the extent the Company believes that recovery is not likely, a valuation allowance is established against the net deferred tax asset, which increases the Company's income tax expense in the period when such determination is made. The Company recognizes a tax benefit from uncertain tax positions in the financial statements only when it is more likely than not the position will be sustained upon examination by relevant tax authorities. The Company recognizes interest and penalties related to income tax matters in Income tax expense. Refer to Note 9 - Income Taxes for further discussion. EARNINGS PER SHARE Basic earnings per common share is calculated by dividing Net income by the weighted average number of common shares outstanding during the year. Diluted eamings per common share is calculated by adjusting weighted average outstanding shares, assuming conversion of all potentially dilutive stock options and awards. Refer to Note 12 - Earnings Per Share for further discussion. MANAGEMENT ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates, including estimates relating to assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Additionally, the extent to which the evolving COVID-19 pandemic impacts the Company's financial statements will depend on a number of factors, including the further spread and duration of COVID-19 and the economic impacts of the pandemic. There remains risk that COVID-19 could have a material, adverse impact on future revenue growth as well as overall profitability. NOTE 2 - INVENTORIES Inventory balances of $8,420 million and $6,854 million as of May 31,2022 and 2021 , respectively, were substantially all finished goods. NOTE 3 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net included the following: Capitalized interest was not material for the fiscal years ended May 31, 2022, 2021 and 2020. NOTE 4 - IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL Identifiable intangible assets, net consist of indefinite-lived trademarks, acquired trademarks and other intangible assets. The following table summarizes the Company's Identifiable intangible assets, net balances: Goodwill was \$284 million and \$242 million as of May 31, 2022 and 2021, respectively, and there were no accumulated impairment losses as of May 31, 2022 and 2021. Additionally, the impact to Goodwill during fiscal 2022 and 2021 as a result of acquisitions and divestitures was not material. NOTE 5 - ACCRUED LIABILITIES Accrued liabilities included the following: (1) Refor to Note 20 - Acqusitions and Divesntures for additional informatian