Required:

Use the financial statements in your Nike 10-K for Fiscal 5/31/18, and download the Nike 10Q for the three months ended August 31, 2018, and Adidas's 2017 annual Financial Statements and half year Financial Statements as of June 30, 2018, to answer the questions below.You must show all your calculations that support your answers.Write the numbers and calculations in the boxes provided. To come up with averages you are going to need to get the Balance Sheet for Nike at May 31, 2016, and Adidas for 2015. You will find this financial information on their website in the investor's relations section. Make sure you compute the ratios from their financial statements.If you just copy them from a website like Google you will get the wrong numbers since they are based on more current financial information.This assignment is mandatory and cannot count as the one we drop. You can do this in teams of 2.

Liquidity and efficiency analysis

1.

Calculate Nike's current ratio at 5/31/18 and 5/31/17.

2.

Calculate Nike's current ratio for August 31, 2018.

3.

Calculate Adidas's current ratio at December 31, 2017 and December 31, 2016.

4.

Calculate Adidas's current ratio at June 30, 2018.

5.

Calculate Nike's quick ratio (acid test ratio) at May 31, 2018 and August 31, 2018.

6.

Calculate Adidas's quick ratio at December 31, 2017 and June 30, 2018.

7.

Has Nike's current and quick ratio improved since FYE 5/31/17?Are they doing better than Adidas? Explain.

8.

Calculate Nike's average collection period for FYE 5/31/18 and FYE 5/31/17. (Hint: use sales from income statement since credit sales info is not available)

9.

Calculate Adidas's average collection period for 2017 and 2016.

10.

Has Nike's average collection period improved since FYE 5/31/17? Are they doing better than Adidas?

11.

Calculate Nike's days in inventory for FYE 5/31/18 and FYE 5/31/17.

12.

Calculate Adidas's days in inventory for 2017 and 2016.

13.

Has Nike's days in inventory improved since FYE 5/31/17? Are they doing better than Adidas?

14.

Calculate Nike's asset turnover ratio for FYE 5/31/18 and FYE 5/31/17.

15.

Calculate Adidas's asset turnover ratio for 2017 and 2016.

16. Use the liquidity and efficiency ratios you have just calculated to discuss Nike's liquidity and efficiency.In your discussion, include comparisons to Adidas.

Long-term solvency analysis

17.

Calculate Nike's debt to total assets ratio at 5/31/18 and 5/31/17.

18.

Calculate Nike's debt to total assets ratio at August 31, 2018.

19.

Calculate Adidas's debt to total assets ratio at December 31, 2017 and December 31, 2016.

20.

Calculate Adidas's debt to total assets ratio at June 30, 2018.

21.

Calculate Nike's debt to equity ratio at 5/31/18 and 5/31/17.

22.

Calculate Nike's debt to equity ratio at 8/31/18.

23.

Calculate Adidas's debt to equity ratio at December 31, 2017 and December 31, 2016

24.

Calculate Adidas's debt to equity ratio at June 30, 2018.

25.

Calculate Nike's times interest earned ratio at 5/31/18 and 5/31/2017.

26.

Calculate Adidas's times interest earned ratio at December 31, 2017 and December 31, 2016.

27.

Use the solvency ratios you have just calculated to discuss Nike's solvency. In your discussion, include comparisons to Adidas.

Profitability analysis

28.

Using excel perform vertical analysis on Nike's Statement of Income for FYE 5/31/18, FYE 5/31/17 and FYE 5/31/16 and the three months ended August 31, 2018 and August 31, 2017.

Print and attached this analysis to the assignment.

29.

Has Nike's gross profit rate improved since FYE 5/31/16? What is causing the change?Reading MD&A will help you here.

30.

Has Nike's profit margin ratio improved since FYE 5/31/16?

What is causing the change?Looking at items after gross margin will help you here.

31.

Using excel perform vertical analysis on Adidas's Income Statement for 2017, 2016 and 2015 and the six months ended June 30, 2018 and June 30, 2017. Print and attached this analysis to the assignment.

32.

Has Adidas's gross profit rate improved since 2015? What is causing the change?Reading MD&A will help you here.

33.

Has Adidas's profit margin ratio improved since 2015?

What is causing the change?Looking at items after gross margin will help you here.

34.

Calculate Nike's return on assets ratio for FYE 5/31/18, 5/31/17 and FYE 5/31/16.

35.

Calculate Adidas's return on assets ratio for 2017, 2016 and 2015.

36.

Has Nike's return on assets ratio improved since FYE 5/31/16? Are they doing better than Adidas? Explain.

37.

Calculate Nike's return on common stockholders' equity ratio for FYE 5/31/18, 5/31/17 and FYE 5/31/16.

38.

Calculate Adidas's return on common stockholders' equity ratio for 2017, 2016 and 2015.

39.

Has Nike's return on common stockholders' equity ratio improved since FYE 5/31/16? Are they doing better than Adidas? Explain.

40. Use the profitability ratios you have just calculated to discuss Nike's profitability. Be sure to include comparisons to Adidas.

41.Based on the income statements you looked at, make reasonable assumptions about Nike's growth and prepare a simplified income statement for fiscal year ending 5/31/19. (Revenues - Expenses = Net Income)

42.Based on the income statements you looked at, make a reasonable assumption about Adidas's growth and prepare a simplified income statement for 2018. (Revenues - Expenses = Net Income)

43. Based on ALL of the ratios you have just calculated, which company is a better investment, Nike or Adidas? Why?(You should probably consider their stock price performance and dividend payouts in this discussion even though I did not ask questions about those.)