As a newly hired manager at your chosen company, you have the first task of reviewing the company’s past and current financial documents and making initial financial projections so that the company can begin planning for the upcoming year. Your report will include several tables, along with a comprehensive narrative describing Nike's financial performance and health. Note that, in addition to the organization’s financial statements and website, other authoritative news sources—such as annual reports and external sites like Bloomberg—may offer insights that facilitate analysis or provide information on the organization’s priorities and challenges.

Recent Financial Performance

1. Assess what Nike's consolidated income statements for the last three years say about its financial performance. Use relevant indicators, graphs, and spreadsheets to support your narrative. (Include all spreadsheets in an appendix.) For example, what do the amounts and year-to-year changes in revenue, operating income, net profit or loss, and earnings before interest, taxes, depreciation, and amortization tell you? Do any items stand out?

2. Assess what Nike's consolidated cash flow statements for the same time period say about its financial performance. Use relevant indicators, graphs, and spreadsheets to support your narrative. For example, what do the amounts and year-to-year changes in cash from operating activities, cash from investing, cash from financing, and total cash flow tell you? Do any items stand out?

3. Assess Nike’s underlying financial performance. Support your answer with the analysis above and relevant research. For example, is recent performance substantially affected by unusual events such as a major acquisition or spin-off? Is the business thriving or struggling in its industry? How do you know?

C. Current Financial Health

1. Assess how Nike's capitalized and what that tells you about its financial health. Support your response with relevant graphs, spreadsheets, and indicators such as cash and cash equivalents, total debt, shareholders’ equity, current ratio, debt/equity ratio, and days sales outstanding (DSO). For example, does the organization have enough cash for payroll and other bills? Does it have the right mix of debt versus equity (stock)? How do you know?

2. Does Nike have the right amount of cash and other resources (key people, technologies, reputation, physical assets, etc.) to fuel future growth? What does this suggest for business decisions? For example, if it has too much cash, should it pay a large dividend, repurchase its own shares, or reinvest the excess funds?

3. Assess the financial value of the company using relevant indicators. What does your assessment imply for future business health and performance? For example, what is the business’s current market value? What is its price-to-earnings ratio? What do these suggest about investor perceptions of the business’s future?

Answer rating: 100% (QA)

Recent Financial Performance 1 Nikes consolidated income statements for the last three years reflect a consistent and significant growth in revenue operating income net profit or loss and earnings bef... View the full answer