27 Sep Create your complete analysis report as a Word document by copying the relevant sections of the Excel spreadsheet into the document. This report will include your ratio computations, a
** SEE FILE ATTACHED
Create your complete analysis report as a Word document by copying the relevant sections
of the Excel spreadsheet into the document. This report will include your ratio computations,
a financial trend comparison and an industry-performance comparative financial analysis.
Include a synopsis of the major ratios computed in Part Two A as well as the following
sections:
Financial Trend Comparison
For each of the five ratio categories: Liquidity, Asset Utilization, Profitability, Debt
Utilization, and Market Values, write a paragraph regarding the trend and implications about
the future financial health of the company. You do not have to address every single category,
just enough to determine the overall trend.
Comparative Financial Analysis of the company compared to the industry performance
Write a paragraph regarding your company's comparative performance to the industry average
(or its closest competition for the most recent year. Many times, it is not possible to find the
industry averages for several of the categories. Supplement this analysis by evaluating the results of
the company's closest competitor. You do not have to address every single category, just enough to
determine the overall situation.
4
Graphical Analysis
Describe the financial trend and comparative financial analysis graphically. Be creative here, a
picture is worth a thousand words! Under each chart write one sentence summarizing the
financial trend and comparative analysis from above
START HERE
| Congatulations on achieving the first step towards mastering Financial Management by reinforcing your foundational knowledge in Algebra, Numerology, and Financial Accounting. You are now well equipped to master a company's important Financial Management functions: evaluating its financial performance, comparing its performance over time (trend analysis) and in comparison (comparative analysis) to other firms in the industry. |
| Why is this important? Many times you are enticed to invest in a company's stock because there is a lot of buzz on social media or your barber/hairdresser told you this is a sure deal ased on an inside tip! You will learn through your Business program that it is critical to possess this deep understanding of Financial Management, supplement it with data on the economy, industry and other considerations that allow you to rationally improve future decision-making. |
| We want to make sure you understand the synergies with the impressive work you have already done on the review of Accounting concepts. This project is designed to show you how to build on this work to make important Financial Management decisions. You can also supplement this analysis with data visulaization techniques that Excel allows you to do. |
| Once you understand these vital steps you will be well on the road to controlling the important inputs to keep creating and adding value for your chosen company to improve its long term performance. You can also use this type of analysis to make important investment decisions, in terms of investing in stocks and bonds for the long haul based on fundamental analysis. Good luck! |
| Please start this exercise by including the Financial Statement information that you have already gathered from the Accounting Review section into the next tab labelled "Input". Then check the results in the tabs following beginning with Liquidity etc. |
Input
| NIKE, INC. | NKE | |||||||||
| Ratio Analysis | |||||||||
| Input Worksheet | |||||||||
| 9/12/23 | |||||||||
| Gray cells will be calculated for you. You do not need to enter anything into them. When inputting the Q1 to Q4 data ensure that it is chronologically accurate with the end of Q4 being the same | |||||||||
| Enter amounts into the yellow cells only. | |||||||||
| Be sure to enter industry averages for the ratio calculations on the other pages of the spreadsheet by replacing every cell which contains red font. Use your algebraic skills you have already mastered to calculate the deviation or the variance of your company's ratio with the industry/peer company's avarage | |||||||||
| Line Item | Beginning of Year | ||||||||
| Inventory | $7,700.0 | ||||||||
| Total assets | $38,577 | ||||||||
| Owners' equity | $14,809 | ||||||||
| Number of common shares | 1,611 | ||||||||
| Line Item | Q1 | Q2 | Q3 | Q4 | Annual | ||||
| Current assets | 26,962 | 28,213 | 28,877 | 27,447 | $27,447 | ||||
| Fixed assets | 8,340 | 8,287 | 8,223 | 8,224 | $8,224 | ||||
| Other assets | 3,275 | 3,821 | 3,988 | 3,976 | $3,976 | ||||
| Total assets | 38,577 | 40,321 | 41,088 | 39,647 | $39,647 | ||||
| Average total assets | 38,577 | 39,449 | 39,833 | 39,112 | $39,112 | ||||
| Cash and cash equivalents | 8,704 | 8,574 | 7,226 | 6,490 | $6,490 | ||||
| Inventory | 7,700 | 8,420 | 9,662 | 9,326 | $9,326 | ||||
| Average inventory | 7,700 | 8,060 | 8,681 | 8,513 | $8,513 | ||||
| Current liabilities | 8,818 | 10,730 | 10,919 | 10,199 | $10,199 | ||||
| Total liabilities | 23,768 | 25,040 | 25,266 | 24,375 | $24,375 | ||||
| Owners' equity | 14,809 | 15,281 | 15,822 | 15,272 | $15,272 | ||||
| Number of common shares | 1,611 | 1,595 | 1,586 | 1,572 | 1,572 | ||||
| Average number of common shares | 1,611 | 1,603 | 1,598 | 1,592 | 1,592 | ||||
| Average owners' equity | 14,809 | 15,045 | 15,316 | 15,041 | $15,041 | ||||
| Market price per share | 129.72 | 112.24 | 98.11 | 103.00 | $103.00 | ||||
| Operating Cash flow | 7,433 | 8,199 | 8,767 | 9,191 | $33,590 | ||||
| Cash flow per share | 4.61 | 5.12 | 5.49 | 5.77 | $21.11 | ||||
| Dividends paid | 484 | 481 | 480 | 480 | $1,925 | ||||
| Total sales | 10,871.0 | 12,234 | 12,687 | 13,315 | $49,107 | ||||
| Cost of sales | 5,804 | 6,731 | 7,072 | 7,604 | $27,211 | ||||
| Other Operating expenses | 3,438 | 4,035 | 3,920 | 4,124 | $15,517 | ||||
| Operating income | 1,629.0 | 1,468 | 1,695 | 1,587 | $6,379 | ||||
| Earnings before interest and taxes | 1,629 | 1,468 | 1,695 | 1,587 | $6,379 | ||||
| Interest expense | 53 | 40 | 13 | 16 | $122 | ||||
| Net income | 1,396 | 1,439 | 1,468 | 1,331 | $5,634 | ||||
Liquidity
| NIKE, INC. | |||||||||||||||||||||||||||||||||||
| Ratio Analysis | |||||||||||||||||||||||||||||||||||
| Liquidity Ratios | Q1 | Q2 | Q2 | Q3 | Q4 | Annual | |||||||||||||||||||||||||||||
| Definition: | |||||||||||||||||||||||||||||||||||
| Current Ratio | = | Current Assets | 3.06 | = | $26,962 | 2.63 | = | $28,213 | 2.64 | = | $28,877 | 2.69 | = | $27,447 | 2.69 | = | $27,447 | ||||||||||||||||||
| Current Liabilities | $8,818 | $10,730 | $10,919 | $10,199 | $10,199 | ||||||||||||||||||||||||||||||
| Industry Average | Insert the Industry Average for this ratio here. If you are unable to get reliable data for the Industry Average please access the data for your company's closest competitor | 1.27 | |||||||||||||||||||||||||||||||||
| Variance | 3.06 | 2.63 | 2.64 | 2.69 | 1.42 | ||||||||||||||||||||||||||||||
| Quarterly Growth/Decline | (0.43) | 0.02 | 0.05 | ||||||||||||||||||||||||||||||||
| Quick Ratio | = | Current Assets – Inventory | 2.18 | = | $26,962 | – | $7,700 | 1.84 | = | $28,213 | – | $8,420 | 1.76 | = | $28,877 | – | $9,662 | 1.78 | = | $27,447 | – | $9,326 | 1.78 | = | $27,447 | – | $9,326 | ||||||||
| Current Liabilities | $8,818 | $10,730 | $10,919 | $10,199 | $10,199 | ||||||||||||||||||||||||||||||
| Industry Average | 0.62 | ||||||||||||||||||||||||||||||||||
| Variance | Insert the Industry Average for this ratio here. If you are unable to get reliable data for the Industry Average please access the data for your company's closest competitor | 2.18 | 1.84 | 1.76 | 1.78 | 1.16 | |||||||||||||||||||||||||||||
| Quarterly Growth/Decline | (0.34) | (0.08) | 0.02 | ||||||||||||||||||||||||||||||||
| Net Working Capital Ratio | = | Current Assets – Current Liabilities | 0.47 | = | $26,962 | – | $8,818 | 0.43 | = | $28,213 | – | $10,730 | 0.44 | = | $28,877</
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