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Analyze Nike The following data are taken from recent financial statements of Nike, Inc. (NKE) (in millions): a. Determine the amount of change (in millions) and percent of change in operating income from Year 1 to Year 2. Round to one decimal place. b. Determine the percentage relationship between operating income and sales for Year 2 and Year 1. Round to one decimal place. c. What conclusions can you draw from your analyses?

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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 3, Problem 5MAD
Textbook Problem
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Analyze Nike

The following data are taken from recent financial statements of Nike, Inc. (NKE) (in millions):

Chapter 3, Problem 5MAD, Analyze Nike The following data are taken from recent financial statements of Nike, Inc. (NKE) (in

a. Determine the amount of change (in millions) and percent of change in operating income from Year 1 to Year 2. Round to one decimal place.

b. Determine the percentage relationship between operating income and sales for Year 2 and Year 1. Round to one decimal place.

c. What conclusions can you draw from your analyses?

a.

To determine

Determine the amount and percentage of change in the operating income from year 1 to year 2.

Explanation of Solution

Calculation of amount of change in the operating income from year 1 to year 2:

Amountofchangeinnetincome=(Operating incomeinyear2)-(Operatingincomeinyear1)=$4,502-$4,175=$327million

Thus, the amount of change in the operating income from year 1 to year 2 is $327 million

b.

To determine

Determine the percentage relationship between operating income and sales of year 2 and year 1.

c.

To determine

Explain the conclusion drawn from the analysis.

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Chapter 3 Solutions

Financial And Managerial Accounting
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