Capital Structure

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Company Information

My company choice is Nike Inc. (Nike), a multinational sports footwear, equipment and apparel manufacturing company based in Oregon, United States. This puts Nike in the apparel industry. In 2010, Forbes rated Nike as the top sports business with a total value of $10.7 billion.

The most effective marketing strategy Nike employ is the sponsorship agreements they have with numerous top athletes in a variety of sports.

Operating Risks of Nike

When Nike was initially started out, the aim was to improve the social, labor and environmental impacts the business has, motivated by the need to manage risks. However they have also incorporated innovation to help make Nike a more sustainable business that involves
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The higher this ratio, the higher the amount of dividend that a shareholder earns for each dollar invested, making it more enticing to profit chasing investors.

YCharts plots a graph showing the change in the dividend yield based on the change in share price on a daily basis. On September 19, 2014 the yield of Nike Inc. was at 1.17%.

Stock History of Nike

In the previous 5 years, Nike has enjoyed continuous success as it has experienced a steady rise in stock prices (except for small period of share price drop), starting at $29.32 on September 21, 2009 to its current highest point of $81.81 on September 20,2014.

Analysis and Investment Decisions

Taking a look at the total capital structure of Nike, as well as its operating and financial risks, Nike seems to be in a good position. With a relatively low debt to capitalization ratio of 11.26%, Nike are heavily internally financed by shareholders, so they are not operating at a high risk in terms of having enough resources to cover their debts, both short-term and long-term.

Looking at the balance sheet of Nike over the last three years, although cash and cash equivalent have been volatile and fluctuating yearly, the total assets have been increasing, to match the increasing total liabilities owed by Nike.

The ever-evolving market, along with the economic, social and political factors that affect business performances,

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