Hypothetical balance sheets of Nike, Inc. are presented here. NIKE, INC. Condensed Balance Sheet May 31 ($ in millions) 2022 2021 Assets Current Assets $9,550 $8,880 Property, plant, and equipment (net) 2,050 1,840 Other assets 1,480 1,780 Total assets $13,080 $12,500 Liabilities and Stockholders' Equity Current Liabilities $3,230 $3,330 Long-term liabilities 1,270 1,370 Stockholders’ equity 8,580 7,800 Total liabilities and stockholders' equity $13,080 $12,500 (a) Prepare a horizontal analysis of the balance sheet data for Nike, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.5%.) NIKE, INC. Condensed Balance Sheet May 31 ($ in millions) 2022 2021 Increase (Decrease) Percentage Change from 2021 Assets Current Assets $9,550 $8,880 $enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Property, plant, and equipment (net) 2,050 1,840 enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Other assets 1,480 1,780 enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Total assets $13,080 $12,500 $enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Liabilities and Stockholders' Equity Current Liabilities $3,230 $3,330 $enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Long-term liabilities 1,270 1,370 enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Stockholders’ equity 8,580 7,800 enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Total liabilities and stockholders' equity $13,080 $12,500 $enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % (b) Prepare a vertical analysis of the balance sheet data for Nike for 2022. NIKE, INC. Condensed Balance Sheet choose the accounting period May 31, 2022For the Year Ended May 31, 2022For the Month Ended May 31, 2022 $ (in millions) Percent Assets Current Assets $9,550 enter percentages rounded to 1 decimal place % Property, plant, and equipment (net) 2,050 enter percentages rounded to 1 decimal place % Other assets 1,480 enter percentages rounded to 1 decimal place % Total assets $13,080 enter percentages rounded to 1 decimal place % Liabilities and Stockholders' Equity Current Liabilities $3,230 enter percentages rounded to 1 decimal place % Long-term Liabilities 1,270 enter percentages rounded to 1 decimal place % Stockholders’ equity 8,580 enter percentages rounded to 1 decimal place % Total liabilities and stockholders' equity $13,080 enter percentages rounded to 1 decimal place %
Hypothetical balance sheets of Nike, Inc. are presented here. NIKE, INC. Condensed Balance Sheet May 31 ($ in millions) 2022 2021 Assets Current Assets $9,550 $8,880 Property, plant, and equipment (net) 2,050 1,840 Other assets 1,480 1,780 Total assets $13,080 $12,500 Liabilities and Stockholders' Equity Current Liabilities $3,230 $3,330 Long-term liabilities 1,270 1,370 Stockholders’ equity 8,580 7,800 Total liabilities and stockholders' equity $13,080 $12,500 (a) Prepare a horizontal analysis of the balance sheet data for Nike, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.5%.) NIKE, INC. Condensed Balance Sheet May 31 ($ in millions) 2022 2021 Increase (Decrease) Percentage Change from 2021 Assets Current Assets $9,550 $8,880 $enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Property, plant, and equipment (net) 2,050 1,840 enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Other assets 1,480 1,780 enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Total assets $13,080 $12,500 $enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Liabilities and Stockholders' Equity Current Liabilities $3,230 $3,330 $enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Long-term liabilities 1,270 1,370 enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Stockholders’ equity 8,580 7,800 enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % Total liabilities and stockholders' equity $13,080 $12,500 $enter a dollar amount enter percentages rounded to 1 decimal place rounded to 1 decimal place % (b) Prepare a vertical analysis of the balance sheet data for Nike for 2022. NIKE, INC. Condensed Balance Sheet choose the accounting period May 31, 2022For the Year Ended May 31, 2022For the Month Ended May 31, 2022 $ (in millions) Percent Assets Current Assets $9,550 enter percentages rounded to 1 decimal place % Property, plant, and equipment (net) 2,050 enter percentages rounded to 1 decimal place % Other assets 1,480 enter percentages rounded to 1 decimal place % Total assets $13,080 enter percentages rounded to 1 decimal place % Liabilities and Stockholders' Equity Current Liabilities $3,230 enter percentages rounded to 1 decimal place % Long-term Liabilities 1,270 enter percentages rounded to 1 decimal place % Stockholders’ equity 8,580 enter percentages rounded to 1 decimal place % Total liabilities and stockholders' equity $13,080 enter percentages rounded to 1 decimal place %
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 103.4C
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Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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Question
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Hypothetical balance sheets of Nike, Inc. are presented here.
(a) Prepare a horizontal analysis of the balance sheet data for Nike, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.5%.)
(b) Prepare a vertical analysis of the balance sheet data for Nike for 2022.
|
NIKE, INC.
Condensed May 31 ($ in millions) |
||||
|---|---|---|---|---|
|
2022
|
2021
|
|||
|
Assets
|
||||
|
Current Assets
|
$9,550
|
$8,880
|
||
|
Property, plant, and equipment (net)
|
2,050
|
1,840
|
||
|
Other assets
|
1,480
|
1,780
|
||
|
Total assets
|
$13,080
|
$12,500
|
||
|
Liabilities and
|
||||
|
Current Liabilities
|
$3,230
|
$3,330
|
||
|
Long-term liabilities
|
1,270
|
1,370
|
||
|
Stockholders’ equity
|
8,580
|
7,800
|
||
|
Total liabilities and stockholders' equity
|
$13,080
|
$12,500
|
(a) Prepare a horizontal analysis of the balance sheet data for Nike, using 2021 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.5%.)
|
NIKE, INC.
Condensed Balance Sheet May 31 ($ in millions) |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
|
2022
|
2021
|
Increase
(Decrease) |
Percentage
Change from 2021 |
||||||
|
Assets
|
|||||||||
|
Current Assets
|
$9,550
|
$8,880
|
$enter a dollar amount
|
enter percentages rounded to 1 decimal place rounded to 1 decimal place
|
%
|
||||
|
Property, plant, and equipment (net)
|
2,050
|
1,840
|
enter a dollar amount
|
enter percentages rounded to 1 decimal place rounded to 1 decimal place
|
%
|
||||
|
Other assets
|
1,480
|
1,780
|
enter a dollar amount
|
enter percentages rounded to 1 decimal place rounded to 1 decimal place
|
%
|
||||
|
Total assets
|
$13,080
|
$12,500
|
$enter a dollar amount
|
enter percentages rounded to 1 decimal place rounded to 1 decimal place
|
%
|
||||
|
Liabilities and Stockholders' Equity
|
|||||||||
|
Current Liabilities
|
$3,230
|
$3,330
|
$enter a dollar amount
|
enter percentages rounded to 1 decimal place rounded to 1 decimal place
|
%
|
||||
|
Long-term liabilities
|
1,270
|
1,370
|
enter a dollar amount
|
enter percentages rounded to 1 decimal place rounded to 1 decimal place
|
%
|
||||
|
Stockholders’ equity
|
8,580
|
7,800
|
enter a dollar amount
|
enter percentages rounded to 1 decimal place rounded to 1 decimal place
|
%
|
||||
|
Total liabilities and stockholders' equity
|
$13,080
|
$12,500
|
$enter a dollar amount
|
enter percentages rounded to 1 decimal place rounded to 1 decimal place
|
%
|
(b) Prepare a vertical analysis of the balance sheet data for Nike for 2022.
|
NIKE, INC.
Condensed Balance Sheet choose the accounting period May 31, 2022For the Year Ended May 31, 2022For the Month Ended May 31, 2022 |
|||||
|---|---|---|---|---|---|
|
$ (in millions)
|
Percent
|
||||
|
Assets
|
|||||
|
Current Assets
|
$9,550
|
enter percentages rounded to 1 decimal place
|
%
|
||
|
Property, plant, and equipment (net)
|
2,050
|
enter percentages rounded to 1 decimal place
|
%
|
||
|
Other assets
|
1,480
|
enter percentages rounded to 1 decimal place
|
%
|
||
|
Total assets
|
$13,080
|
enter percentages rounded to 1 decimal place
|
%
|
||
|
Liabilities and Stockholders' Equity
|
|||||
|
Current Liabilities
|
$3,230
|
enter percentages rounded to 1 decimal place
|
%
|
||
|
Long-term Liabilities
|
1,270
|
enter percentages rounded to 1 decimal place
|
%
|
||
|
Stockholders’ equity
|
8,580
|
enter percentages rounded to 1 decimal place
|
%
|
||
|
Total liabilities and stockholders' equity
|
$13,080
|
enter percentages rounded to 1 decimal place
|
%
|
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