Identifying Long Term Trends

Better Essays
In this module case study I will briefly review Nike Inc. (NKE) and how important it is for the financial managers to use economic variables in order to identify their long term financial goals. I will also go over a few techniques that the financial managers of Nike Inc. could use for economic forecasting in the global economy.

Financial managers must be able to understand as many economic aspects affecting the market in any part of the world that would influence their company. Economic Variables are any data accounted for in an economic model. An economic variable is any measurement that helps to determine how an economy functions. Examples include population, poverty rate, inflation, and available resources. (Financial Dictionary, 2014) There are many economic variables that you can consider when trying to understand the market, but there are six key variables that financial managers would be better off honing in on.
Six Key Economic Variables
a. Real GDP
b. Unemployment rate
c. Rate of inflation
d. Interest rate
e. Level of the stock market
f. Exchange rate
(Six key economic variables (Power Points)., 2002)

By identifying these six key economic variables, the financial managers at Nike will have a clear understanding on how various markets are performing economically and be able to react depending on which direction the market is heading. The first variable mentioned above was the Gross Domestic Product, and is one of the most important
Get Access