Phân tích tài chính công ty Nike

Group 4 members:
TRẦN TUẤN ANH
VÕ HOÀNG TUẤN ANH
TRẦN NHẬT ĐAN THANH
NGUYỄN THỊ THỦY
VÕ THỊ THÙY TRANG
Date: 23th April, 2015
1
Financial And Decision Making
NIKE Inc.
2
Table of content

Company profile

SWOT Analysis

Financial performance analysis

Capital Structure Analysis

Stock Price Determination

Recommendation

References
3
Company Profile
•
Established in 1968 by Phil Knight
•

Head quarter : Beaverton, Oregon
•
48,000 employees
•
Revenue in 2014: $ 27.8 billion
4
PRODUCTs
Nike is manufacturing many different
product ranges such as footwear, apparels
and accessories, etc
5
SWOT ANALYSIS
•
Outsourcing
•
Strong cash
low
•
Diversified
range of
product.
•
Price
sensitive
•
Emerging
market
growth.
•
Direct to

customer
.
•
Market
competitio
n
•
Price
competitiv
e
6
Financial performance analysis
1. Liquidity ratios
2. Asset Management ratios
3. Profitability ratios
7
1. Tools that help us determine the
financial health of a firm’s
2. Compare a company’s financial ratios
with its ratios in previous year
3. Compare a company’s financial ratios
with those of its industry
Financial performance analysis
8
1. Liquidity ratios:
The current ratio is balance-sheet financial performance
measure of company liquidity.
Quick Ratio: measures the ability of the firm to meet its
debt payments on short notice
Financial performance analysis

9

Current ratios= current assets divided by
current liabilities
Financial performance analysis
Table 1.1
2010 2011 2012 2013 2014Average
Current ratios
3.3 2.9 3 3.5 2.7 3.08
10
Financial performance analysis
2010 2011 2012 2013 2014 Average
0
0.5
1
1.5
2
2.5
3
3.5
Current ratios
Current ratios
In 2014 Nike have a good manage, current ratios lower than previous year
( 2010,2011, 2012, 2013)
Average 5 year: 3.08
11
Financial performance analysis
Table 1.2
2010 2011 2012 2013 2014 Average
Quick ratios

1.16

1.29 0.98

1.41

1.38 1.24
Quick ratios = current assets ( minus inventory)
divided by current liabilities
12
Financial performance analysis
2010 2011 2012 2013 2014 Average
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Quick ratios
Quick ratios

Average quick ratio of Nike in 5 year was 1.24

So Nike co. has a normal quick ratio. The ability of the firm to meet $1.24
debt payments $ 1
13
1. Asset management ratios:

.
Inventory turnover ratio
.
Total asset turnover ratios
Financial performance analysis
14
Financial performance analysis
Table 1.3
2010 2011 2012 2013 2014
1. Inventory turnover ratio = COGS ( Net
sales)/ Average inventory
9.38 7.65 7.18 7.27 7.04
Asset Management ratios
.
1.Inventory turnover ratio = COGS ( Net sales)/ Average inventory
Inventory turnover ratio is used to measure the inventory management
efficiency of a business
15
Financial performance analysis

Inventory turnover ratio of Nike company reduce year by year. So Nike company
manage is good.
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
0
2
4
6
8
10
1. Inventory turnover ratio = COGS ( Net sales)/ Average inventory

1. Inventory turnover
ratio = COGS ( Net
sales)/ Average
inventory
16
Financial performance analysis
2. Total asset turnover ratio: sales/Average total assets
Table 1.4
2010 2011 2012 2013 2014
2. Total asset turnover ratios 1.32 1.40 1.58 1.44 1.50
This ratio measures how efficiently a firm uses its assets to generate
sales, so a higher ratio is always more favorable. Higher turnover
ratios mean the company is using its assets more efficiently
17
Financial performance analysis
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
1.1
1.2
1.3
1.4
1.5
1.6
2. Total asset turnover ratios
Nike have This ratio increase year by year from 2010 to 2012. this
time have high efficiently to used its assets to generate sales.
2013: lower efficiently
2014: increase and get high ratio. Increase effeciently.
18

Profitability ratios

1. Gross profit margin
2. Return on equity
Financial performance analysis
19
Financial performance analysis
1. Gross profit margin= gross grofit/ sales
Table 1.5
2010 2011 2012 2013 2014
Gross profit margin 46.4% 45.7% 43.5% 43.6% 44.8%
20
Financial performance analysis
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
43.0%
44.0%
45.0%
46.0%
47.0%
Gross profit margin = Gross profit/sales
Gross profit margin =
Gross profit/sales
Nike gross margins improved largely due
For fiscal 2014, the growth of Nike net income from continuing operations was
positively affected by a year-over-year decrease in our effective tax rate.
In addition, diluted earnings per common share grew at a higher rate than net
income due to a 1% decrease in the weighted average number of diluted
21
Financial performance analysis
2.Return on equity = net income/average equity
Table 1.6 2010 2011 2012 2013 2014Average
ROE 0.207 0.22 0.22 0.23 0.25 0.22

22
Financial performance analysis
2010 2011 2012 2013 2014 Average
0.18
0.19
0.2
0.21
0.22
0.23
0.24
0.25
ROE = net income/average equity
ROE = net income/average equity
Nike managed to efficiently use its capital
Profit was on a continuous growth
The company’s financial was independence and its high possibility to attract
investment
Investor want to see high return on equity ratio because this indicates that Nike
company is using its investors’ funds effectively
Debt to capital Ratio: (or Debt ratio) indicates the percentage of
debt that a company uses to finance its operation
Debt ratio = total liabilities/ total asset
23
NIKE’s CAPITAL STRUCTURE ANALYSIS
24
NIKE’s CAPITAL STRUCTURE ANALYSIS
Debt ratio
Source: Based on data from Nike Inc. annual reports and Stock Analysis on Net (in
millions).

31-May-
14
31-May-
13
31-May-
12
31-May-
11
31-May-
10
Total current
liabilities
3,364.00
3,958.00
3,865.00
3,926.00
5,027.00
Total non-current
liabilities
1,301.00
1,197.00
1,219.00
2,502.00
2,743.00
Total Liabilities
4,665.00
5,155.00
5,084.00
6,428.00
7,770.00

Total Equity
10,824.00
11,156.00
10,381.00
9,843.00
9,754.00
Total Capital
15,489.00
16,311.00
15,465.00
16,271.00
17,524.00
Debt/Capital
Ratio
0.30
0.32
0.33
0.40
0.44
Market
Benchmark
0.53
0.49
0.48
0.48
0.48
25
NIKE’s CAPITAL STRUCTURE ANALYSIS
Debt/Capital Ratio
Market Benchmark

0.3
0.53
0.32
0.49
0.33
0.48
0.4
0.48
0.44
0.48
NIKE’s Debt-to-Capital ratio
31-May-14 31-May-13 31-May-12 31-May-11 31-May-10