Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
¶ … balance sheet would be recognized at historical cost?
The balance sheet presents a list of the firms' long- and short-term assets and liabilities. The historical cost convention sees assets measured at their historical price; the price that was paid for them when they were purchased, rather than estimating the current value. Where historical cost is used, the assets are assessed based on their historical value, and then deprecated over their estimated useful life. On Nikes balance sheet, it is the property, plant and equipment, including buildings, equipment and computer hardware and software are recorded at cost, which are listed under the long-term assets.
Which of the items listed using historical cost could potentially be the most undervalued?
The method of accounting for these assets means that at any point in time it is highly likely the book value of the assets on the accosting will different form the current value. The assets which are most likely to be undervalued are those which may appreciate rather than depreciate. For example, there was $273 million in land,...
Goods which may be included here are items such as hardware and software, where it is not only a matter of age, but technological progress which may result in more rapid loss of market value. It is also possible that goodwill may be undervalued, it is for these reasons that note 3 of the Nike accounts indicates the value of these are checked for impairment.
Justify and evaluate if the notes to the financial statements disclose fair market values on these items identified.
The accounts notes do not give the fair market value for these assets. Fair market value is used for other assets, such as derivatives used for hedging, but is not given for the long-term assets. The firm notes that gaining accurate fair market prices/values for assets, such as international real estate would be problematic.
What is the amount of Total Assets on the Balance Sheet? Evaluate if the balance seemed high, low, or just about right to you. Justify your answer.
The total amount of assets on the balance sheet is shown as $21,600 million for 2015, which has increased from $18,594 for 2014. These may appear to be very high levels of assets, as the…
Reference
Nike, (2015) 10k, available at http://s1.q4cdn.com/806093406/files/doc_financials/2015/ar/docs/nike-2015-form-10K.pdf
Nike 10-K The author of this report has been asked to review and assess the recent 10-K filing that Nike put forth to their investors, the SEC and the public at large as part of their burden as a public company. The items and factors that will be assessed when it comes to the Nike and their 10-K will include the format of their balance sheet, whether the author of this
Assets at Nike Current assets are an important element of the balance sheet. However, to understand what assets are available it is necessary examine how the assets classes are assessed and qualified. For example, receivables are an asset, as this is money which is earned and owed to the firm, but not yet received. Looking at the Nike 10-k, the accounts receivable is adjusted to allow for bad debts (Nike,
Nike Financial Analysis Nike earned a net income of 2.133 billion in fiscal 2011 on revenues of $20.862 billion. A trend analysis of the income statement shows that net income grew 9.7% in FY 2011, whereas the net income grew by 11.8%. In the previous year (FY2010), Nike's revenue actually declined by 0.8%, while the net income increased by 28.2%. The performance over the past two years indicates that Nike has faced
This strategy of customization increases sales and profits per pair of shoes produced. Successful Acquisitions and Partnerships Nike acquired Official Starter Properties and Official Starter in later 2004. These two entities were the sole owners and licensors of the Starter, Team Starter and Asphalt brand names as well as master licensee of the Shaq and Dunkman brands (a line of athletic apparel, footwear and accessory products for the value retail channel).
Nike: Financial Analysis The relevance of analyzing the financial stability and health of an entity cannot be overstated especially when it comes to the determination of the future performance of the concerned entity. This text undertakes an in-depth financial analysis of Nike, a well-known footwear, equipment, and apparel designer. In seeking to conduct an in-depth analysis of Nike, I will amongst other things describe the company and its operations in significant detail,
5% of total liabilities. Their retained earnings, on the other hand, total $5.073 billion. The heavy use of retained earnings is partially explained by their view of themselves as a growth company. While they pay a dividend, Nike prefers to re-invest much of its profits back into expansion. They do not feel that the market has matured sufficiently to stop their aggressive growth strategy. Another consideration in their capital structure