For over 80 years, the adidas Group has been part of the world of sports on every level, delivering state-of-the-art sports footwear, apparel and accessories.9 Today, the adidas Group, headquartered in Germany is a global leader in the sporting goods industry and offers a broad portfolio of products. Products from the adidas Group are available in virtually every country of the world. The group describes its strategy as simple: continuously strengthen its brands and products to improve its competitive position and financial performance.
The adidas Group has divided its operating activities by major brands into three segments:
Adidas
Footwear, apparel, and hardware such as bags and balls
Reebok
Footwear, apparel and hardware
Taylor Made-Adidas Golf
Golf equipment: metal woods, irons, putters, footwear, apparel and accessories
Effective 31 December 2011, the adidas Group employed 46,824 people.
From its annual reports 2007 through 2011, we extracted the following consolidated statements of financial position and income statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union, and the additional requirements of German commercial law pursuant to § 315a section 1 HGB. Given the introductory nature of this case study, the consolidated statement of financial position and income statement have been simplified. Some line items have been grouped and are indicated by an asterisk (*). The original version is available to the instructors on the book€™s website.

From the notes to the 2011 financial statements, we extracted the following additional information:
=> €˜Note 12 Goodwill €“ Goodwill11 primarily relates to the Group€™s acquisitions of the Reebok and Taylor- Made businesses as well as acquisitions of subsidiaries, primarily in the United States, Australia, New Zealand, Netherlands, Denmark and Italy€™.
=> €˜Note 13 Trademarks and other intangible assets€™, indicates that the €˜trademarks€™ are also related to acquisitions by the Group.
Required
1 Prepare the common-size income statements (i.e., all figures as percentage of net sales).
2 Whenever possible, compute the ratios which have been introduced at the end of the chapter for the years 2007 through 2011.
3 Analyze the financial situation and performance of the adidas Group on the basis of these ratios and the common-size income statements.

adidas Group Consolidated statement of financial position (IFRS) (simplified) 31 December 2010 millions Cash and cash equvalents Short-temm fnancalassets and other 1,156 430 775 235 244 428 295 769 curment financal assets 1,707 2482 571 1,667 2,119 508 6435 5,880 855 3,128 755 1,429 1.471 575 4,485 723 2,980 687 1,624 1,995 643 4,934 886 3,093 620 1,459 1,629 669 4,138 Accounts recavabe inventores Other current assets Total current assets Property, pantand equipment Goodwill and trademarks 963 3,243 739 2,921 Long-tem financial assets and othernon- curent assets Total non-current assets 4,187 11380106188,8759,5338,325 186 4945 4738 4,390 4599 Total assets Short-tem borrowings and othercurrent 876 financial liabilities Accounts payable ncome taxes Accrued lablities and provisons 1,886 1,798 1,768 396 1,694 1,553 1,166 194 1,177 1,218 321 1,230 849 1,295 4281 3908 2836 3645 2,615 Total current liabilities Total non-current liabilities 2,087 22632488 2,676 Share capital Reserves Retained earnings 194 (10) 209 209 209 212 161 3,355 3216 2,689 3,034 11380 10,618 8875 9,533 8,325 3,851 4,623 4,352 Total equity 3,776 acu1,0 10870607 8600 0.2 5,331 Total liabilities and equity adidas Group- Consolidated income statement (FRS) (simplified) Year ending December 31 millions Net sales Cost of sales Gross proft Royality and commission income Other operathg expenses het) Operating proft Fnancial income Rinanclal expenses Income before taxes Income taxes Nat income 2011 2010 2008 2007 Signs 13,34411,990 10,381 10,799 10,299 5,417 4,832 7,000 6,344 93 5,426 1,011 31 115 6,260 5,730 100 5,669 4,712 4,9364,290 19 5,543 89 1,070 102+ 25 113 806 238 36 170 815 260 169 203 904 260 644 113 257 670 245