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¶ … 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, 2016). The firm has many customers, some of whom may fail to pay their accounts; this may be due to bankruptcy, dispute or other reasons. Under the concept of prudence, Nike (2016) state that they make an assessment of the level of bad debt likely to be suffered and deduct this from the accounts payable shown as an asset. The firm does not provide details o the level of expected bad debt, merely stating it is based on historical analysis of past bad debt. Notably, the accounts receivable is shown on the balance sheet as a net value, after allowing for bad debts, meaning that the balance sheet for this category is only showing current accounts receivable. Where Accounts Receivable or not current, they are incorporated into the deferred...
Nike (2016) state that the cash equivalents included several different types of assets, firstly there was $105 million in cash collateral which had been received from counterparties due to the firms hedging activities. A category which is often incorporated within cash equivalent, but is separated on the Nike balance sheet of the short-term investments, which included money market funds, corporate notes, U.S. Treasury bonds, and commercial paper (Nike, 2016). The cash equivalent also included some fixed income investments, overall the weighted average duration of cash equivalents was 91 days (90, 2016).
Inventories are also a current asset, and it is noted there is a danger of inventory obsolescence. Inventory valuation at Nike (2016), is valued at the lower of two valuation method; the cost of production, or market value. The cost of production is primarily the cost the company pays for the production of the goods, to outsource suppliers, in addition freight and transit fees, taxes, import duties, and insurance (like, 2016). The market value is…
References
Libby, R., Libby, P., & Short, D. G. (2011). Financial Accounting. Maidenhead: Mcgraw-Hill Higher Education.
Nike. (2016), Form 10-K. available at http://s1.q4cdn.com/806093406/files/doc_financials/2016/ar/docs/nike-2016-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
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
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