The financial statements for Nike, Inc., are provided in Appendix D at the end of the text.
Question:
a. Determine the free cash flow for the year ended May 31, 2010. Assume that 90% of additions to property, plant and equipment were used to maintain productive capacity.
b. How might a lender use free cash flow to determine whether or not to give Nike, Inc. a loan?
c. Would you feel comfortable giving Nike a loan based on the free cash flow calculated in (a)?
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...
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a Fiscal year ended May 31 2010 all numbers in thousands Cash ...View the full answer
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Related Book For 
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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