Chapter 14, Problem 2TIF

Real-world annual report

The financial statements for Nike, Inc. (NKE), are presented in Appendix E at the end of the text. The following additional information is available (in thousands):

Instructions

1. 1. Determine the following measures for the fiscal years ended May 31, 2017, and May 31, 2016. Round ratios and percentages to one decimal place.
2. a. Working capital
3. b. Current ratio
4. c. Quick ratio
5. d. Accounts receivable turnover
6. e. Number of days’ sales in receivables
7. f. Inventory turnover
8. g. Number of days’ sales in inventory'
9. h. Ratio of liabilities to stockholders’ equity
10. i. Asset turnover
11. j. Return on total assets, assuming interest expense is $82 million for the year ending May 31. 2017, and $33 million for the year ending May 31, 2016.
12. k. k. Return on common stockholders’ equity
13. l. Price-eamings ratio, assuming that the market price was $52.81 per share on May 31, 2017, and $54.35 per share on May 31, 2016.
14. m. m. Percentage relationship of net income to sales
15. 2. What conclusions can be drawn from these analyses?