Finance project..done part A to E still need the bold parts in the description to be done

1. The parts of the report are discussed below
Your project should include:
a. An overview of the corporation.
i. Provide general information regarding the type of business, products and/or services, location of headquarters, name of CEO, number of employees, and countries of operation, etc.
b. The latest financial statements
i. Get the income statement, balance sheet, cash flow statement, and the statement of owners’ equity for the past fiscal year. Cut and paste them in your report. Do not forget to cite the source under each statement.
ii. If you cannot cut and paste them, you may have to type in the information in a table in your report.
c. A summary of each financial statement
i. Take each statement and state the key parts in words. Tell a story from each of the financial statements. For example, for the income statement, the story starts like, “Total Revenues in 2010 were $10 billion, while Cost of Goods Sold were $8 billion, leaving a gross profit margin of $2 billion, or 20 percent of total revenues….After taking out interest and taxes from EBIT, the net income was $0.5 billion, or 5 percent of total revenues.”
d. Ratio calculation (five major types of ratios, See Chapter 3)
i. Organization this section based on the FIVE types of ratios listed in the text book. Calculate the ratios from the financial statements in part c above using Excel or your calculator and present them in a table.
e. Comparison of ratios with industry averages (find industry averages online)
i. Find industry financial ratios online and compare your corporation’s ratios to these industry ratios.
ii. Present your results following the five types of ratios discussed in part d.
iii. A table with both corporation and industry ratios is required. You must also compare the ratios in words. Do NOT just give me a table.
f. Discussion of key statistics
i. There are many different other statistics available for your corporation. These include market value, beta, and diluted EPS, etc. Discuss some of the key statistics that you think can assist you to determine if this corporation is a good buy or sell.
g. For you to decide if a corporation’s stock is a good buy or sell, you must forecast several key variables, including the stock price.
i. Use historical prices (5 years of monthly data recommended) and forecast the stock price for the next year. Use regression analysis, and/or moving average, etc. to create your forecast.
ii. Create a graph from the historical data and show your forecast on the same graph. You can add a trend line to the graph to help you with a forecast. Include the graph in your report.
iii. You need to say specifically what the forecasted value of the stock price is.
iv. You must address the question, “Is this forecast reasonable?” Must you amend your analysis to get a more reasonable forecast?

h. Other information pertinent to the corporation that could affect its future performance and stock price.
i. This could include dividend policy, capital structure, bond ratings, expert opinions on TV, new projects, litigation, regulation, etc. Search for information on the web regarding this corporation. Look at company complaint blogs, etc.
i. Recommendation regarding the future of this corporation.
i. Is the stock a good buy, average buy, or a poor buy (implying a good sell)?
ii. Include a justification of your recommendation based on your analysis and research. Background:
Nike, originally called Blue Ribbon Sports (BRS), was founded by University of Oregon track athlete Philip Knight and his coach Bill Bowerman in January 1964 and then in 1971 it was officially called Nike, Greek name of the Goddess of victory. Nike is a USA multinational company that specialize in designing, developing and manufacturing of footwear, apparel, equipment and accessories. The company Headquarter is in Washington County, Oregon, in the Portland metropolitan area(Sage, 2008). Nike is present everywhere in the world thanks to its advanced supply chain and its broad line of products that it markets under its own brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Blazers, Air Force 1, Nike Dunk, Air Max, Foamposite, Nike Skateboarding, and subsidiaries including Brand Jordan, Hurley International and Converse. Nike also sponsors high profile athletes like golf super star Tiger Woods under Nike golf and Also soccer Super star Cristiano Ronaldo and so many other Brilliant Athletes.
Nike has offices located in 45 countries outside the United States. Most of the factories are located in Asia, including Indonesia, China, Taiwan, India, Thailand, Vietnam,Pakistan, Philippines, and Malaysia.Also, Nike employees more than 62,600 full-time employees as of the last fiscal year (Mergent, 2015).Nike is considered the major sports equipment supplier in the world, with more than $30 billion in revenues made in the fiscal year of 2015. In addition, Nike has a Market capitalization of $79 billion, net income of $3 billion with dividends of 1.12 and dividend yield of 0.96 (Mergent, 2015).
Nike’s CEO Mark Parker aged 59 years was leading the company in other ways way before he took the position of the CEO. He was a competitive runner at the Penn State University, when he joined Nike as the first footwear designer back in 1979 and was the center of innovation since then. For 30 years in the company he took the position of Vice President of global footwear and co-president of the Nike brand. He also was the leader in many industry breakthroughs in product design. Parker was also the leader in Nike’s global growth which included the acquisition of Converse and Hurley International LLC (Nike, 2015).


Financial Statements:
Standardized Annual Income Statement
Report Date 05/31/2015
Currency USD
Scale Thousands
Total Revenue 30601000
Direct Costs 16534000
Gross Profit 14067000
Selling General & Admin 9892000
Other Operating Expense -58000
Total Indirect Operating Costs 9834000
Operating Income 4233000
Interest Income -28000
Other Non-Operating Income 0
Total Non-Operating Income -28000
Earnings Before Tax 4205000
Taxation 932000
Earnings After Tax 3273000
Discontinued Operations –
Extraordinary Items 0
Accounting Changes 0
Net Income 3273000
(Mergent, 2015)
Nike Total revenues in 2015 were $30.6 billion, while direct costs were $16.5 billion leading to a gross profit of $14.1 billion. After deducting total operating cost, operating income were $4.23 billion, removing interest income the EBT were $4.2 billion. After taking out $932 million in interests and taxes the net income was $3.27 billion, which is 10.7% of total revenues.
Standardized Annual Balance Sheet
Report Date 05/31/2015
Currency USD
Scale Thousands
Cash & Equivalents 3852000
Short Term Investments 2072000
Cash &Equivs& ST Investments 5924000
Receivables (ST) 3358000
Inventories 4337000
Current Tax Assets 389000
Other Current Assets 1968000
Total Current Assets 15976000
Gross Property Plant & Equip 6352000
Accumulated Depreciation 3341000
Net Property Plant & Equip 3011000
Intangible Assets 412000
Other Assets 2201000
Total Assets 21600000
Accounts Payable & Accrued Exps 6082000
Accounts Payable 2131000
Accrued Expenses 3951000
Current Debt 181000
Discontinued Ops (ST Liab) –
Other Current Liabilities 71000
Total Current Liabilities 6334000
LT Debt & Leases 1079000
Other Liabilities 1480000
Total Liabilities 8893000
Common Share Capital 3000
Additional Paid-In Capital 6773000
Retained Earnings 4685000
Accum Other Comprehensive Income 1246000
For Curr Trans (BS) -11000
Other Equity 11000
Total Equity 12707000
Total Liabilities & Equity 21600000
(Mergent, 2015)
Nike’s Balance sheet of 2015 shows that available cash of $3.8 billion, receivables of $3.3 billion and inventories of $4.3 billion leading to $15.97 billion in current assets. Also Nike has Net property plant and equipment of $3 billion, totaling $21.6 billion in Total Assets. Regarding liabilities, Nike’s Account payable has $2.3 billion and current liabilities are $6.3 billion. Nikes total liabilities in 2015 were $8.89 billion.
Standardized Annual Cash Flows
Report Date 05/31/2015
Currency USD
Scale Thousands
Net Income 3273000
Adjustments from Inc to Cash 1151000
Change in Working Capital 256000
Cash Flow from Operations 4680000
Purchase of Pty Plant & Equip -963000
Purchase of Investments -5086000
Proceeds from Pty Plant & Equip 3000
Disposal of Investments 5871000
Change in Business Activities –
Other Investing Cash Flows 0
Cash Flow from Investing -175000
Change in ST Debt -63000
Change in LT Debt -26000
Change in Equity -1802000
Payment of Dividends -899000
Other Financing Cash Flows 0
Cash Flow from Financing -2790000
Effect of Exchange Rate -83000
Change in Cash 1632000
Opening Cash 2220000
Closing Cash 3852000
Depn&Amortn (CF) 649000
Net Purch of Pty Plant & Equip -960000

(Mergent, 2015)
From Nike’s cash flow we see that Adjustment from Inc to Cash is $1.1 billion, the change in the working capital is $256 million, cash flow from operation is $4.68 billion, and disposal of investments is $5.8 billion. Cash was also spent on Purchase of investments $5 billion, purchase of property and equipment $963 million, change in equity was $1.8 billion; cash flow from financing was $2.79 billion.
Common stock at stated value: In Thousands
Class A convertible — 178 and 178 shares outstanding —

Class B — 679 and 692 shares outstanding 3,000

Capital in excess of stated value 6,773,000

Accumulated other comprehensive income 1,246,000

Retained earnings 4,685,000

Total shareholders’ equity 12,707,000

In terms of equity, Nike common share Capital are $3 million, Paid in-capital of $6.7 billion and retained earnings of $4.68 billion, totaling equity to $12.7 billion. 
Ratios Calculation:
Profitability Ratios Nike Industry
ROA % (Net) 16.29 13.1
ROE % (Net) 27.82 NA
ROI % (Operating) 32.36 18.8
EBITDA Margin % 15.81 15.4
Calculated Tax Rate % 22.16 NA
Revenue per Employee 488,834 432,984
(Mergent, 2015)/(DailyFinance, 2015)
ROAis the return on assets it indicates how effectively assets are being used to produce profit. Nike, is above the industry average by 3.2 points.
ROI is the annualized income expressed as a percentage of average invested capital. Nike has %32.36, %14.2 higher than the industry average.
EBITDA is the earnings before interest, tax, depreciation and amortization, The higher the EBITDA margin, the less operating expenses eat into a company’s bottom line, leading to a more profitable operation. In our Case Nike has %15.81, 0.4 points above industry average.
Revenue per EmployeeIs the revenue that every employee generates for the company on average. Nike Revenue per employee is $55,850 higher than the industry.

Liquidity Ratios Nike Industry
Quick Ratio 1.47 1.4
Current Ratio 2.52 2.6
Net Current Assets % TA 44.64 NA
(Mergent, 2015)/(DailyFinance, 2015)

Quick Ratio measures whether assets readily convertible into cash could meet current obligations. A quick ratio over 1 is generally considered satisfactory and Nike quick ratio in 0.7 points higher the average.
Current Ratio is measured by dividing current assets by current liabilities. A ratio of 2.5 is generally considered satisfactory; however, Nike current ratio is a bit below industry average.
Debt Management Nike Industry
LT Debt to Equity 0.08 NA
Total Debt to Equity 0.1 0.23
Interest Coverage 151.18 35.8
(Mergent, 2015)/(DailyFinance, 2015)
Total Debt to Equity is long external funding compared with equity funding; Nike is below industry average by 0.13 points which good.
Interest Coverage is how many times interest expense is covered by operating income; Nike’s interest expense is 151.18 times covered by operating income, which is 114 times more than industry average.
Asset Management Nike Industry
Total Asset Turnover 1.52 1.3
Receivables Turnover 9.01 10.3
Inventory Turnover 3.99 3.2
Accounts Payable Turnover 15.07 NA
Accrued Expenses Turnover 9.5 NA
Property Plant & Equip Turnover 10.47 NA
Cash & Equivalents Turnover 10.08 NA
(Mergent, 2015)/(DailyFinance, 2015)
Total Asset Turnoveristhe ratio of the value of a company’s sales or revenues generated relative to the value of its assets. Nike has 1.52 turnover ratios, 0.22 points above industry average.
Receivables Turnovermeasure is used to quantify a firm’s effectiveness in extending credit and in collecting debts on that credit; Nike has a score of 9.01 below industry average of 10.3.
Inventory Turnover is a measure of the number of times inventory is sold or used in a time period. The equation for inventory turnover equals the Cost of goods sold divided by the average inventory. Nike’s score is 0.79 points above industry average.

Per Share Nike Industry
Cash Flow per Share 5.43 NA
Book Value per Share 14.83 NA
(Mergent, 2015) 
References:
DailyFinance. (2015). Retrieved Sep. 22,2015 from http://www.dailyfinance.com/quote/nyse/nike/nke/financial-ratios
Nike, Inc. (2015). Executives.Retrieved Sep.22,2015 from http://about.nike.com/pages/executives
Mergent, Inc. (2015). Nike Inc. data report. Retrieved Sep. 22, 2015, from Mergent Online database. http://uk.reuters.com/article/2008/06/26/business-nike-results-dc-idUKWNAS924120080626
Sage, Alexandria ( 2008). “Nike profit up but shares tumble on U.S. concerns”. Reuters. Retrieved 2008-07-10.

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