Please answer all parts ILL THUMBS UP$!!!!$

FSA $6$: times interest earned and price earnings ratios:

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Ratio: times interest earned

You will use the NIKE financial statements in appendix C for this ratio. Round the ratio to the nearest tenth.

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The formula for Times interest earned

$=($income before taxes $+$ interest expense$)$

$$ interest expense

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$5/31/21$ ratio $=$

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$5/31/20$ ratio

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This ratio computes the number of times interest payments could be paid out of current period earnings. Because interest payments reduce income tax expense, the ratio is computed using income before tax. High values of this ratio are considered favorable. In contrast, low values are considered unfavorable. Values of this ratio less than $1\mathrm{.}0$ suggest that the firm is unable to cover interest payments from current period income before tax.

Calculate both ratios and comment on NIKEs profitability between the two years

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Ratio: price$-$earnings ratio $$

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The formula for price$-$earnings ratio is:

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$$ Market price per share of common stock $$

$$ Earnings per share on common stock

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This ratio measures the company$$s future earnings prospects. The market price per share was $136\mathrm{.}46$ for $5/31/21$ and $98\mathrm{.}58$ for $5/31/20.$ Use the basic earnings per share from the consolidated statements of income for the denominator. Round the ratio to the nearest hundredth.

$5/31/21$ ratio $=$

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$5/31/20$ ratio$=$

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Calculate both ratios and comment on NIKEs profitability between the two years have served as the Company's auditor since $1974.$

NIKE, Inc. Consolidated Statements of Income

YEAR ENDED MAY $31,$

The accompanying Notes to the Consoldated Financial Statements are an integral part of this statement.

NIKE, Inc. Consolidated Statements of Comprehensive Income

The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.

NIKE, Inc. Consolidated Balance Sheets The accompanying Notes to the Consolidated Financial Statements are an integral pert of this statement.

NIKE, Inc. Consolidated Balance Sheets

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multirow$[$b$]\{2\}\{*\}\{($in milions$)\}$ & $\backslash$multicolumn$\{4\}\{|$c$|\}\{$MAY $31,\}\backslash \backslash$

$\backslash$hline & $\backslash$multicolumn$\{2\}\{|$r$|\}\{2021\}$ & $\backslash$multicolumn$\{2\}\{|$r$|\}\{2020\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$ASSETS$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$Current assets:$\}\backslash \backslash$

$\backslash$hline Cash and equivalents & $\backslash$$ & $9\mathrm{.}889$ & $\backslash$$ & $8,348\backslash \backslash$

$\backslash$hline Short$-$term investments & & $3,587$ & & $439\backslash \backslash$

$\backslash$hline Accounts receivable, net & & $4,463$ & & $2,749\backslash \backslash$

$\backslash$hline Inventories & & $6\mathrm{.}864$ & & $7,367\backslash \backslash$

$\backslash$hline Prepaid expenses and other current assets & & $1\mathrm{.}498$ & & $1\mathrm{.}653\backslash \backslash$

$\backslash$hline Total current assets & & $26\mathrm{.}291$ & & $20,556\backslash \backslash$

$\backslash$hline Property, plant and equipment, net & & $4,904$ & & $4,866\backslash \backslash$

$\backslash$hline Operating lease right$-$of$-$use assets, net & & $3,113$ & & $3,097\backslash \backslash$

$\backslash$hline Idertifiable intangible assets, net & & $269$ & & $274\backslash \backslash$

$\backslash$hline Goodwill & & $242$ & & $223\backslash \backslash$

$\backslash$hline Deferred income taxes and other assets & & $2,921$ & & $2,326\backslash \backslash$

$\backslash$hline TOTAL ASSETS & $\backslash$$ & $37,740$ & $\backslash$$ & $31,342\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$LIABILITIES AND SHAREHOLDERS' EQUITY$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$Current liabilities:$\}\backslash \backslash$

$\backslash$hline Current portion of long$-$term debt & $\backslash$$ & $-$ & $\backslash$$ & $3\backslash \backslash$

$\backslash$hline Notes payable & & $2$ & & $248\backslash \backslash$

$\backslash$hline Accounts payable & & $2\mathrm{.}836$ & & $2,248\backslash \backslash$

$\backslash$hline Current portion of operating lease liablities & & $467$ & & $445\backslash \backslash$

$\backslash$hline Accrued liablities & & $6\mathrm{.}063$ & & $5,184\backslash \backslash$

$\backslash$hline hocme taxes payable & & $306$ & & $156\backslash \backslash$

$\backslash$hline Total current liabiaties & & $9,674$ & & $8,284\backslash \backslash$

$\backslash$hline Long$-$term debt & & $9\mathrm{.}413$ & & $9,406\backslash \backslash$

$\backslash$hline Operating lease labilities & & $2,931$ & & $2,913\backslash \backslash$

$\backslash$hline Deferred income taxes and other liabilities & & $2,965$ & & $2\mathrm{.}664\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$Commitments and contingencies $($Note $18)\}\backslash \backslash$

$\backslash$hline Pedeemable preferred stock & & $-$ & & $-\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$Shareholders$\text{'}$ equity:$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$Common stock at stated value:$\}\backslash \backslash$

$\backslash$hline Class A convertible $-305$ and $315$ shares outstanding & & $-$ & & $-\backslash \backslash$

$\backslash$hline Class B $-1,273$ and $1,243$ shares outstanding & & $3$ & & $3\backslash \backslash$

$\backslash$hline Capital in excess of stated value & & $9,965$ & & $8,299\backslash \backslash$

$\backslash$hline Accumulated ther comprehensive income $($loss$)$ & & $(380)$ & & $(56)\backslash \backslash$

$\backslash$hline Retained earnings $($deficit$)$ & & $3,179$ & & $(191)\backslash \backslash$

$\backslash$hline Total shareholders' equity & & $12,767$ & & $8,055\backslash \backslash$

$\backslash$hline TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY & $\backslash$$ & $37,740$ & $\backslash$$ & $31,342\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.

NIKE, Inc. Consolidated Statements of Cash Flows

YEAR ENDED MAY $31,$

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multirow$[$b$]\{2\}\{*\}\{($Dolars in milions$)\}$ & $\backslash$multicolumn$\{2\}\{|$r$|\}\{\backslash$multirow$[$b$]\{2\}\{*\}\{2021\}\}$ & $\backslash$multicolumn$\{2\}\{|$r$|\}\{\backslash$multirow$[$b$]\{2\}\{*\}\{2020\}\}$ & $\backslash \backslash$

$\backslash$hline & & & & & $2019\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{6\}\{|$l$|\}\{$Cash provided $($used$)$ by operations:$\}\backslash \backslash$

$\backslash$hline Net income & $\backslash$$ & $5,727$ & $\backslash$$ & $2,539$ & $\backslash$$$4,029\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$