Using Nike's financial statements and any additional resources if necessary, determine which part of Nike’s Balance Sheet and Income Statement represent OPERATING assets, OPERATING liabilities, and Operating income.

B. Then calculate NOPAT (Net operating profit after tax), NOA (net operating asset), RNOA (return on net operating asset), and Gross Profit Margin for 2017, 2016, and 2015 using the definition of these ratios. Compare these numbers and ratios across the three years and indicate any trends. Please make any necessary adjustments to the income statement and balance sheet numbers as you see fit, e.g.: remove non-operating assets and liabilities from both the income statement and the balance sheet. For tax, please simply use Nike’s average tax rate when calculating NOPAT.

C. Show the decomposition of Nike’s RNOA into NOPM (net operating profit margin) and NOAT (net operating asset turnover) using the numbers from part a. for both 2017, 2016, and 2015. What do these ratios suggest about the change of performance of Nike across the past three years?

  

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NIKE, Inc. Consolidated Statements of Income (In millions, except per share data) Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest expense (income), net Other (income) expense, net Income before income taxes Income tax expense NET INCOME Earnings per common share: Basic Diluted Dividends declared per common share The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. $ $ 69 69 2017 Year Ended May 31, 2016 34,350 $ 19,038 15,312 3,341 7,222 10,563 59 (196) 4,886 646 4,240 S 2.56 $ 2.51 $ 0.70 $ 32,376 $ 17,405 14,971 3,278 7,191 10,469 19 (140) 4,623 863 3,760 $ 2.21 $ 2.16 $ 0.62 $ 2015 30,601 16,534 14,067 3,213 6,679 9,892 28 (58) 4,205 932 3,273 1.90 1.85 0.54 NIKE, Inc. Consolidated Statements of Income (In millions, except per share data) Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest expense (income), net Other (income) expense, net Income before income taxes Income tax expense NET INCOME Earnings per common share: Basic Diluted Dividends declared per common share The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. $ $ 69 69 2017 Year Ended May 31, 2016 34,350 $ 19,038 15,312 3,341 7,222 10,563 59 (196) 4,886 646 4,240 S 2.56 $ 2.51 $ 0.70 $ 32,376 $ 17,405 14,971 3,278 7,191 10,469 19 (140) 4,623 863 3,760 $ 2.21 $ 2.16 $ 0.62 $ 2015 30,601 16,534 14,067 3,213 6,679 9,892 28 (58) 4,205 932 3,273 1.90 1.85 0.54

Answer rating: 100% (QA)

A operating assets are those assets which are used in the business for the generation of Revenue in questin the following items can be considered as o... View the full answer