Working Capital Strategis Essay examples

In 2010 Nike basked in all its glory as it was its best financial year as per record as they reached $19 Billion and Market Capital roared to $63.45 Billion while its rival walked in the hall of shame for having the finished way behind financially.

The report focuses on the Economic Value Added of Nike Inc. The analysis is conducted through a detailed assessment of the financial statements including income statement, balance sheet, and cash flow. Such financial statements are then applied to derive common-size statements for income statement and balance. The trends and predictions obtained from the common-size statements predict the future economic value. Similarly, the Pro-forma financial statements derived provide vital future economic performances of Nike Inc. According to the regression analysis and the assessment of the common-size and Pro-forma financial statements; Nike Inc. has a growth in revenue and earnings per share. The EVA computed using WACC, Net Operating Profit after Taxes (NOPAT), and Invested Capital is positive (+$391.24); this shows that Nike Inc. is financially stable and will grow in the next three years.

Nike 's sales and earnings outpaced Wall Street estimates FY 06. Nike 's sales reached $15 billion and its earnings per share were up 18%. Over the past 5 years, Nike 's earnings per share on compounded rate were up 20%, gross margins averaged 42% and in the past year, Nike delivered 44% margins in a period of rising costs. The current managers are maximizing shareholder 's wealth but in the footwear industry, Nike 's performance still falls. The footwear industry averaged about 14.25%, while Nike 's growth in stock was 10.48%. If the increase in value of shares is a benchmark of performance for managers, Nike 's performance is unimpressive. The brand itself is considered the biggest strength of Nike.  Nike earns more revenues from its international operations than its domestic market. Nike earned about $6.5 billion FY 2005 from its international operations, compared to $5.1 billion from its domestic market. International operations appear to be a key driver of Nike 's growth. The picture below illustrates Nikes price trend for the last five years.

In the last couple of years Nike’s sales have decreased which were targeted at 15-19 year olds. This problem has caused Nike to lose customers which means a loss in sales/ profits. Over the past few months competitors have been raising their strategies to bring in customers in which increases their profits. This is having a negative effect on Nike, if Nike carry on the way

Nike is a company that has thoroughly embedded itself into the psyche of people around the world. It's a company that started with humble origins from selling footwear in the basement to becoming the behemoth in the athletic industry. Bill Bowerman, University of Oregon track & field coach, and Phil Knight, middle-distance runner under Bowerman co-founded Nike. Nike was first established as Blue Ribbon Sports in 1964 as a partnership and the name Nike was officially adopted on May 30, 1978. The infamous Nike Logo - Swoosh, was created for a fee of $35 by Carolyn Davidson, a graphics design student. In 1980, Nike becomes a publicly traded company with the completion of its Initial Public Offering of 2,377,000 shares

Nike opened on August 14 at $113 per share. However, it quickly dropped from $114 per share on August 19 to $103 on August 25. A month later on September 25 the stocks soared to $125, but dropped to $119 on September 29. It rose to its highest point on October 19 at $133 per share. It ended on November 13 at $113 per share ("NKE Interactive Stock Chart Yahoo! Inc. Stock - Yahoo!

is a growth company. Over the last 10 years, we’ve more than doubled our revenue, and they have stated “we believe we’ll deliver $30 billion in revenue by FY15 and $36 billion by FY17.” Since we published our FY10/11 Sustainable Business Performance Summary, our overall employee base grew to approximately 48,000 at the end of FY13, an increase of 10,000 employees. We expect strong growth in Running, Basketball, Football, Men’s Training, Sportswear, Women’s Training and Direct to Consumer sales. As we look forward, we believe that sustainability is one of the key drivers that will catalyze innovation and lead us toward continued growth. NIKE, seeks to deliver shareholder value through sustainable growth. One of the ways we will achieve this goal is to find avenues to reach our long-term vision of decoupling profitable growth from constrained resources. The CEO shared that they are working to integrate sustainability into every aspect of our business. Our aim is to challenge, push and explore ways that change the game entirely for materials, design and manufacturing. We don’t grow just to get bigger. We grow to be better and do

S &A / Sales, Current Assets / Sales, and Current Liability / Sales have been adopted from previous income statements and balance sheets from 1995 to 2001. Perhaps, we can take new assumptions. Generally, the case issue is to examine if the share price of Nike is undervalue or overvalue and the common stock of Nike Inc should be added to the North

The price of Nike’s common stock has gone down in the past five years. It was at its highest point in 1997 and next highest in 1999.

Every year thousands of stocks are brought and sold. This buying and selling of stocks stimulates the economy while maintaining a healthy relationship between buyers and sellers. Nike is a corporation that operates in the Textile Apparel Footwear and Accessories industry. Nike offers common stock and the purchasing price of the stock was $123.46. Nike has promoted its products through commercials that show famous athletes wearing the brand.

An analysis of Nike’s stock from when it went public in 1980 to now shows a clear upward trend overall. It should be noted, however, that in 2015 Nike issued a 2-1 stock split which in effect increases its number of outstanding shares while at the same time, lowers the price. This makes the stock more favorable to smaller investors looking to own Nike.

Based on my analysis of Nike 's past financial conditions I would recommend that Nike expands its operations into an emerging market. Based on the analysis of Brazilian market I would recommend that Nike enters the Brazilian market. The entry should add 2,096 million net sales and $220 million net income to Nike 's income statement by 2020. The percent of sales from South America will grow from 6.4% now to 8.2% in five years.

Similarities & Differences: Within the financial statement of Nike, Inc. there are tremendous similarities due to the consistency as well efficiency of the conduction of business. However, with these similarities is a fair deal of differences due to economic stability as well as the adoption product ideas and innovative methods that aid Nike to continue for the better of the company: by reaching new levels of sustainability as they enhance product performance, by developing, more meaningful connections with consumers, and by presenting their products in compelling experiences at retail. The annual reports of 2010 to 2014 clearly distinguish the letter to shareholders in the same placement but the content with each year are not similar by any means; within 2010, they created six new strategic geographies to focus their effort where passion and culture of sport are strongest. Nike pushed forward an aggressive retail agenda in store and online. Revenue at $19 billion the previous year went down 1 percent under EPS and future orders. Their income from other operation contributed more than $2.5 billion in revenue and generated $2.8 billion in free cash flow from operations and had $5 billion in cash and short-term investments on their balance sheet. Revenue from direct to consumer increased 12% to near $2.5 billion. Gross margins came in at 46.3 percent for the year. That was the year of the World cup, whereby they showed tremendous acceleration they generated in the back of

After sluggish focus and growth in the 1980ies, Nike experienced strong growth in the 1990ies and cemented the position as global recognizable brand. The increased international focus created strains on the supply chain, which was consider inadequate to cater efficiently to the organization and the rapid changes consumer demands . As a consequence of the afore mentioned supply chain problem Nike faced inefficient inventory management, problems in flow of goods and poor demand

Enderle, K., Hirsch, D., Micka, L., Saving, B., Shah, S., Szerwinski, T. (2000, March 14). Strategic Analysis of Nike, Inc. Retrieved on December 14, 2005, from