The Nike SEC From 10-K is reproduced in Appendix C. Review it and answer the following questions.
REQUIRED:
a. How large is inventory compared to the other assets on NIKE’s balance sheet? Did inventory increase, decrease, or remain the same as a percent of total assets from 2008 to 2009?
b. What is the primary cost associated with NIKE’s cost of sales, and how did this account vary as a percent of sales from 2007 to 2009?
c. Did NIKE appear to pay off its suppliers faster or slower during 2009 compared to 2008?
d. Review the operating section of NIKE’s statement of cash flows and comment on the cash flow implications associated with the changes in the primary working capital accounts during 2009.
e. See Note 1. Does NIKE use the LIFO, FIFO, or averaging assumption? See Note 2. Why are NIKE’s inventories predominantly finished goods?