Examine Nike’s Form 10-K report in Appendix C, focusing on the income statement and balance sheet. Answer the following questions:
1. Nike used the term consolidated to describe its financial statements. What does this mean?
Does Nike have any consolidated subsidiaries in which it has less than 100% ownership? How do you know?
2. Suppose Nike’s retail stores buy shoes from Converse , a wholly owned subsidiary of Nike, to resell in its stores. Suppose that at the end of fiscal 2012, Converse had recorded $10 million of such sales and all the shoes were still in Nike stores’ inventories. Converse’s inventory value for the shoes was $6 million. How do such sales of Converse affect the consolidated income statement and balance sheet of Nike? Ignore tax effects.
3. In Exhibit 17-8 on p. 732 you will find 10 ratios for Nike for fiscal 2010 and 2011. For each ratio, explain whether the 2011 ratio is an improvement over the 2010 value.

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