The NIKE 10-K Form is reproduced in Appendix C.
REQUIRED:
a. Review the NIKE SEC Form 10-K and analyze the financial statements by assessing NIKE's earning power and solvency, and provide support for your assessments. Start by using the ratio framework illustrated in Figure 5-3.
b. Find the operating segment information disclosed by NIKE. Which of NIKE's segments generates the most revenues, and what percent is it of the total? Which of the segments has the highest profit margin, and which segment has the fastest long-lived asset turnover?
c. (Appendix 5A) Use the ROE model to analyze the financial statements. Comment on whether NIKE created shareholder value and identify the primary value drivers.
d. (Appendix 5A) Based on the financial statements, make reasonable assumptions about NIKE's sales growth, expense/sales ratio, sales/total assets ratio, and liabilities to total asset ratio for 2010, and prepare a simplified income statement and balance sheet for NIKE for 2010.
