1. Nike, Inc. 2021-002 Daniel Cibran ACG

2. Daniel Cibran ACG2021 002 Annual Report Project Directions : Annual Report Project Directions : DURING THE CLASS THAT COVERS CHAPTER 15, GET PROFESSOR APPROVAL FOR THE COMPANY YOU WANT TO ANALYZE. DURING THE CLASS THAT COVERS CHAPTER 15, GET PROFESSOR APPROVAL FOR THE COMPANY YOU WANT TO ANALYZE. PREPARE A POWERPOINT PRESENTATION: Modify and enhance this powerpoint template—replace any italicized words in this template with your own. Add images, tables, backgrounds, etc. !!! THIS TEMPLATE IS BASED ON THE ANNUAL REPORT PROJECT PARTS A-E (OPTION C-exclude cash flow adequacy, pages 56-58) IN TEXT. PREPARE A POWERPOINT PRESENTATION: Modify and enhance this powerpoint template—replace any italicized words in this template with your own. Add images, tables, backgrounds, etc. !!! THIS TEMPLATE IS BASED ON THE ANNUAL REPORT PROJECT PARTS A-E (OPTION C-exclude cash flow adequacy, pages 56-58) IN TEXT. SAVE YOUR PROJECT AS A WEB PAGE--NAME YOUR FILE YOUR THREE INITIALS AND YOUR COMPANY NAME. SAVE YOUR PROJECT AS A WEB PAGE--NAME YOUR FILE YOUR THREE INITIALS AND YOUR COMPANY NAME. BE SURE YOUR WEBPAGE INCLUDES A LINK TO THE CORPORATIONS' F/S! BE SURE YOUR WEBPAGE INCLUDES A LINK TO THE CORPORATIONS' F/S! SEND YOUR WEB-READY PRESENTATION AS AN E-MAIL ATTACHMENT TO susan.crosson@sfcc.edu BY THE DUE DATE LISTED IN COURSE CALENDAR. ALL SUBMISSIONS WILL BE POSTED ON OUR COURSE WEBSITE. SEND YOUR WEB-READY PRESENTATION AS AN E-MAIL ATTACHMENT TO susan.crosson@sfcc.edu BY THE DUE DATE LISTED IN COURSE CALENDAR. ALL SUBMISSIONS WILL BE POSTED ON OUR COURSE WEBSITE. THE ANNUAL REPORT PROJECT IS WORTH 18 POINTS. THE ANNUAL REPORT PROJECT IS WORTH 18 POINTS.

3. Executive Summary After my analyses of Nike, Inc. it is apparent to me from the acquisition of other companies, divisions of the corporation in other markets besides athletic footwear and apparel, and the growth of their earnings for their stockholders. Nike’s financial status is excellent. In fiscal year 2005 they had a revenue growth of 12.5% to 13 million. Through ongoing innovation and business venues Nike will be at the forefront of athletic shoes, apparel, and fashion for years to come.http://www.nike.com/nikebiz/nikebiz.jhtml?page=17

4. Introduction CEO: Mark G. Parker CEO: Mark G. Parker Home Office: Beaverton, Oregon Home Office: Beaverton, Oregon Ending date of last Fiscal Period: May 31, 2005 Ending date of last Fiscal Period: May 31, 2005 Nike began as a footwear company for track runners at the University of Oregon, now, Nike is the largest seller of athletic footwear and apparel in the world, from Golf to Football, Hockey to Soccer, Nike is on the cutting edge of design and innovation when it comes to sports. Nike began as a footwear company for track runners at the University of Oregon, now, Nike is the largest seller of athletic footwear and apparel in the world, from Golf to Football, Hockey to Soccer, Nike is on the cutting edge of design and innovation when it comes to sports. Nike is an International Corporation that has it’s products sold in over 160 countries worldwide. Nike is an International Corporation that has it’s products sold in over 160 countries worldwide.

5. Audit Report Independent auditors for Nike: PricewaterhouseCoopers LLP Independent auditors for Nike: PricewaterhouseCoopers LLP The Auditors stated that in their opinion the financial position of Nike Inc. presented “overall good”. After the result from cash flow and analysis and results from operations the company is in good standing with PricewaterhouseCoopers. The Auditors stated that in their opinion the financial position of Nike Inc. presented “overall good”. After the result from cash flow and analysis and results from operations the company is in good standing with PricewaterhouseCoopers.

6. Stock Market Information Nike’s Stock Price: $84.47 Twelve month trading range of Nike’s stock: $75.10- $91.54 Dividend per share: $1. 24 Information Dated: February 12, 2006 Buy. Nike has shown improvement and expansion year after year and will improving according to this financial analysis.

7. Industry Situation and Company Plans With a recent change of CEO Nike has brought a new strategy and creativity to innovate the market more than ever before. According to Susquehanna Financial Group the company is heading in a good direction. According to the Letter to the Stockholders the acquisition of Converse, Hurley, and Cole Haan; Nike is expanding their market from just sports apparel to get a broader range of product. http://www.nike.com/nikebiz/investors/annual_report/ar_05/docs/2005_proxy.pdf http://www.nike.com/nikebiz/investors/annual_report/ar_05/docs/2005_proxy.pdfhttp://www.nike.com/nikebiz/investors/annual_report/ar_05/docs/2005_proxy.pdf http://www.cbsnews.com/stories/2006/01/23/business/main1228448.shtml http://www.nike.com/nikebiz/news/pressrelease.jhtml?year=2006&month=02&letter=h http://www.nike.com/nikebiz/news/pressrelease.jhtml?year=2004&month=11&letter=d

8. Income Statement The format is most like a Multi-step format The format is most like a Multi-step format * (Chart in Millions) 20042005 Gross Profit 3561.86115.4 Net Inc. Operations1585.81859.8 Net Income 326.81211.6 -An almost doubling of gross profit is due to increased sales. -Net Inc. Operations and Net Income also increased because of recent acquisitions.

9. Balance Sheet *(Chart in millions) 20042005 Total Assets 8052.98793.6 Total Liabilities 1907.93149.4 Total Stockholders Equity 61455644.2 -Assets increased by 740.7 -Liabilities decreased by 1220.6 -Stockholders Equity decreased by 500.8

10. Statement of Cash Flows Cash flows from operations are more than net income for the past two years. Nike is growing from the purchases of Converse, Hurley and Cole Haan. Nike’s primary source of financing is from stock sales. Overall, cash has seen a big increase over the past two years, mainly in the past year alone.

11. Accounting Policies Significant Accounting Policies: -Basis of Consolidation-Recognition of revenues -Shipping & handling costs-Cash & Equivalents -Stock Based Compensation-Property, Plant, & Equipment -Earnings Per Share Topics of Note to Financial Statements: -Summary of Significant account policies -Inventories-Common Stock -Earnings Per Share-Identifiable Assets and Liabilities -Interest Income-Comprehensive Income -Short term borrowing and credit lines -Long Term Debt-Risk Management & Derivatives -Income Taxes-Operating segments and Related Info. -Redeemable Preferred Stock-Subsequent Event

12. Financial Analysis Liquidity Ratios *(Chart in millions) 20042005 Working Capital 3713.24351.9 Current Ratio 2.73.2 Receivable Turnover 365/5.4= 67.6 days 9893.0/1952.5= 5.0 times Avg. Days Sales Uncollected 365/5.4= 67.6 days 365/5.0= 73 days Inventory Turnover 6313.6/1444.3= 4.3 times 6004.7/1396.4= 4.3 times Avg. Days Inv. on Hand 365/4.4= 82.9 times 365/4.3 =84.8 times

13. Financial Analysis Profitability Ratios 20042005 Asset Turnover2.40.44 Profit Margin4.4%13% Return On Assets11.3%14.6% Return on Equity18.9%23.7%

14. Financial Analysis Solvency Ratio 20042005 Debt the Equity Ratio0.310.12 -The debt to equity change represents the ownership of the corporation. -Nike is owned by the stockholders.

15. Financial Analysis Market Strength Ratios 20042005 Price Earnings per Share 21.6818.3 Dividend Yield.98%.95% -The Market strength ratio shows that there was an increase in 2005. -This is good for the stockholders of the company.