NIKE, Inc. Consolidated Balance Sheets May 31, (In millions) 2016 2015 ASSETS Current assets: Cash and equivalents $ 3,138 $ 3,852 Short-term investments 2,319 2,072 Accounts receivable, net 3,241 3,358 Inventories 4,838 4,337 Prepaid expenses and other current assets 1,489 1,968 Total current assets 15,025 15,587 Property, plant and equipment, net 3,520 3,011 Identifiable intangible assets, net 281 281 Goodwill 131 131 Deferred income taxes and other assets 2,439 2,587 TOTAL ASSETS $ 21,396 $ 21,597 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 44 $ 107 Notes payable 1 74 Accounts payable 2,191 2,131 Accrued liabilities 3,037 3,949 Income taxes payable 85 71 Total current liabilities 5,358 6,332 Long-term debt 2,010 1,079 Deferred income taxes and other liabilities 1,770 1,479 Commitments and contingencies Redeemable preferred stock — — Shareholders’ equity: Common stock at stated value: Class A convertible — 353 and 355 shares outstanding — — Class B — 1,329 and 1,357 shares outstanding 3 3 Capital in excess of stated value 7,786 6,773 Accumulated other comprehensive income 318 1,246 Retained earnings 4,151 4,685 Total shareholders’ equity 12,258 12,707 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 21,396 $ 21,597 NIKE, Inc. Consolidated Statements of Cash Flows Year Ended May 31, (In millions) 2016 2015 2014 Cash provided by operations: Net income $ 3,760 $ 3,273 $ 2,693 Income charges (credits) not affecting cash: Depreciation 649 606 518 Deferred income taxes (80) (113) (11) Stock-based compensation 236 191 177 Amortization and other 13 43 68 Net foreign currency adjustments 98 424 56 Changes in certain working capital components and other assets and liabilities: Decrease (increase) in accounts receivable 60 (216) (298) (Increase) in inventories (590) (621) (505) (Increase) in prepaid expenses and other current assets (161) (144) (210) (Decrease) increase in accounts payable, accrued liabilities and income taxes payable (889) 1,237 525 Cash provided by operations 3,096 4,680 3,013 Cash used by investing activities: Purchases of short-term investments (5,367) (4,936) (5,386) Maturities of short-term investments 2,924 3,655 3,932 Sales of short-term investments 2,386 2,216 1,126 Investments in reverse repurchase agreements 150 (150) — Additions to property, plant and equipment (1,143) (963) (880) Disposals of property, plant and equipment 10 3 3 Decrease (increase) in other assets, net of other liabilities 6 — (2) Cash used by investing activities (1,034) (175) (1,207) Cash used by financing activities: Net proceeds from long-term debt issuance 981 — — Long-term debt payments, including current portion (106) (7) (60) (Decrease) increase in notes payable (67) (63) 75 Payments on capital lease obligations (7) (19) (17) Proceeds from exercise of stock options and other stock issuances 507 514 383 Excess tax benefits from share-based payment arrangements 281 218 132 Repurchase of common stock (3,238) (2,534) (2,628) Dividends — common and preferred (1,022) (899) (799) Cash used by financing activities (2,671) (2,790) (2,914) Effect of exchange rate changes on cash and equivalents (105) (83) (9) Net (decrease) increase in cash and equivalents (714) 1,632 (1,117) Cash and equivalents, beginning of year 3,852 2,220 3,337 CASH AND EQUIVALENTS, END OF YEAR $ 3,138 $ 3,852 $ 2,220 Supplemental disclosure of cash flow information: Cash paid during the year for: Interest, net of capitalized interest $ 70 $ 53 $ 53 Income taxes 748 1,262 856 Non-cash additions to property, plant and equipment 252 206 167 Dividends declared and not paid 271 240 209 Accounts receivable at May 31, 2014: $3,117 Inventories at May 31, 2014: 3,947 Total assets at May 31, 2014: 18,594 Stockholders’ equity at May 31, 2014: 12,000 Accounts receivable at May 31, 2014: $3,117 Inventories at May 31, 2014: 3,947 Total assets at May 31, 2014: 18,594 Stockholders’ equity at May 31, 2014: 12,000 1. Determine the following measures for the fiscal years ended May 31, 2016, and May 31, 2015. Do not round interim calculations. Round the working capital amount in part (a) to the nearest dollar. Round all other final answers to one decimal place. When required, use the rounded final answers in subsequent computations. May 31, 2016 May 31, 2015 a. Working capital (in millions) $ fill in the blank 1 $ fill in the blank 2 b. Current ratio fill in the blank 3 fill in the blank 4 c. Quick ratio fill in the blank 5 fill in the blank 6 d. Accounts receivable turnover fill in the blank 7 fill in the blank 8 e. Number of days' sales in receivables fill in the blank 9 days fill in the blank 10 days f. Inventory turnover g. Number of days' sales in inventory i. Asset turnover j. Return on total assets k. Return on common stockholders' equity l. Price-earnings ratio, assuming that the market price was $54.90 per share on May 29, 2016, and $52.81 per share on May 30, 2015. m. Percentage relationship of net income to sales
NIKE, Inc. Consolidated Balance Sheets May 31,
(In millions) 2016 2015
ASSETS
Current assets:
Cash and equivalents $ 3,138 $ 3,852
Short-term investments 2,319 2,072
Inventories 4,838 4,337
Prepaid expenses and other current assets 1,489 1,968
Total current assets 15,025 15,587
Property, plant and equipment, net 3,520 3,011
Identifiable intangible assets, net 281 281
Goodwill 131 131
Deferred income taxes and other assets 2,439 2,587
TOTAL ASSETS $ 21,396 $ 21,597
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt $ 44 $ 107
Notes payable 1 74
Accounts payable 2,191 2,131
Accrued liabilities 3,037 3,949
Income taxes payable 85 71
Total current liabilities 5,358 6,332
Long-term debt 2,010 1,079
Deferred income taxes and other liabilities 1,770 1,479
Commitments and contingencies
Redeemable
Shareholders’ equity:
Common stock at stated value:
Class A convertible — 353 and 355 shares outstanding — —
Class B — 1,329 and 1,357 shares outstanding 3 3
Capital in excess of stated value 7,786 6,773
Accumulated other comprehensive income 318 1,246
Retained earnings 4,151 4,685
Total shareholders’ equity 12,258 12,707
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 21,396 $ 21,597
NIKE, Inc. Consolidated Statements of Cash Flows Year Ended May 31,
(In millions) 2016 2015 2014
Cash provided by operations:
Net income $ 3,760 $ 3,273 $ 2,693
Income charges (credits) not affecting cash:
Depreciation 649 606 518
Deferred income taxes (80) (113) (11)
Stock-based compensation 236 191 177
Amortization and other 13 43 68
Net foreign currency adjustments 98 424 56
Changes in certain
liabilities:
Decrease (increase) in accounts receivable 60 (216) (298)
(Increase) in inventories (590) (621) (505)
(Increase) in prepaid expenses and other current assets (161) (144) (210)
(Decrease) increase in accounts payable, accrued liabilities and
income taxes payable (889) 1,237 525
Cash provided by operations 3,096 4,680 3,013
Cash used by investing activities:
Purchases of short-term investments (5,367) (4,936) (5,386)
Maturities of short-term investments 2,924 3,655 3,932
Sales of short-term investments 2,386 2,216 1,126
Investments in reverse repurchase agreements 150 (150) —
Additions to property, plant and equipment (1,143) (963) (880)
Disposals of property, plant and equipment 10 3 3
Decrease (increase) in other assets, net of other liabilities 6 — (2)
Cash used by investing activities (1,034) (175) (1,207)
Cash used by financing activities:
Net proceeds from long-term debt issuance 981 — —
Long-term debt payments, including current portion (106) (7) (60)
(Decrease) increase in notes payable (67) (63) 75
Payments on capital lease obligations (7) (19) (17)
Proceeds from exercise of stock options and other stock issuances 507 514 383
Excess tax benefits from share-based payment arrangements 281 218 132
Repurchase of common stock (3,238) (2,534) (2,628)
Dividends — common and preferred (1,022) (899) (799)
Cash used by financing activities (2,671) (2,790) (2,914)
Effect of exchange rate changes on cash and equivalents (105) (83) (9)
Net (decrease) increase in cash and equivalents (714) 1,632 (1,117)
Cash and equivalents, beginning of year 3,852 2,220 3,337
CASH AND EQUIVALENTS, END OF YEAR $ 3,138 $ 3,852 $ 2,220
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest, net of capitalized interest $ 70 $ 53 $ 53
Income taxes 748 1,262 856
Non-cash additions to property, plant and equipment 252 206 167
Dividends declared and not paid 271 240 209
Accounts receivable at May 31, 2014: $3,117
Inventories at May 31, 2014: 3,947
Total assets at May 31, 2014: 18,594
Stockholders’ equity at May 31, 2014: 12,000
Accounts receivable at May 31, 2014: $3,117
Inventories at May 31, 2014: 3,947
Total assets at May 31, 2014: 18,594
Stockholders’ equity at May 31, 2014: 12,000
1. Determine the following measures for the fiscal years ended May 31, 2016, and May 31, 2015. Do not round interim calculations. Round the working capital amount in part (a) to the nearest dollar. Round all other final answers to one decimal place. When required, use the rounded final answers in subsequent computations.
| May 31, 2016 | May 31, 2015 | |||||
| a. | Working capital (in millions) | $ | fill in the blank 1 | $ | fill in the blank 2 | |
| b. | fill in the blank 3 | fill in the blank 4 | ||||
| c. | Quick ratio | fill in the blank 5 | fill in the blank 6 | |||
| d. | Accounts receivable turnover | fill in the blank 7 | fill in the blank 8 | |||
| e. | Number of days' sales in receivables | fill in the blank 9 days | fill in the blank 10 days | |||
| f. | Inventory turnover | |||||
| g. | Number of days' sales in inventory | |||||
| i. | Asset turnover | |||||
| j. | Return on total assets | |||||
| k. | Return on common |
|||||
| l. | Price-earnings ratio, assuming that the market price was $54.90 per share on May 29, 2016, and $52.81 per share on May 30, 2015. | |||||
| m. | Percentage relationship of net income to sales |
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