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Another objective of Nike's strategy consists in optimizing the company's portfolio. This objective can be approached on medium term and on long-term.
15. Who are the following individuals in the company's organization structure:
Chairman
President (CEO)
Members of the Board of Directors.
The company is represented by:
Chairman - Philip H. Knight
President (CEO) - Mark G. Parker
Members of the Board of Directors - David J. Ayre (Vice President), Lewis L. Bird (President, Subsidiaries), Donald W. Blair (Vice President), Mary Kate Buckley (Vice President), Craig Cheek, Thomas E. Clarke, Charles S. Denson, Gary M. DeStefano, Trevor Edwards, Adam S. Helfant, Joaquin Hidalgo, Elliott Hill, P. Eunan McLaughlin, Eric D. Sprunk, Lindsay D. Stewart, Hans van Alebeek, Roland P. Wolfram, Roger S. Wyett.
Part II
1. Compute the ratios listed bellow for the two years provided in your annual report. Show all work clearly.
Current ratio: 2007-3.1% and 2006-2.8%
Quick ratio: 2007-1.6% and 2006-3.6%
Inventory turnover: 2007-4.4% and 2006-4.3%
Profit margin: 2007-43.9% and 2006-44%
Receivable turnover: 2007-6.5% and 2006-6.2%
2. Prepare a typed summary indicating whether you view your company to have improved in these ratio areas from the previous year to the current year. Explain what each ratio indicates about the financial position of the company.
The current ratio is one of the two ratios that measure liquidity, the company's ability to pay its debts. The company's current ratio expresses its ability to pay current liabilities by using current assets only. In Nike's case, the total current assets have increased from $7,346 in 2006 to $8,076 in 2007, on the one hand. On the other hand, the company's current liabilities have decreased from $2,612 in 2006 to $2,584 in 2007. With the current assets increasing and with total liabilities decreasing, the company's ability to pay these debts has significantly increased, adding more financial power to the company.
The other ratio for measuring liquidity is quick ratio that expresses the company's ability to pay its liabilities without relying on the sale of inventory. This ratio depends a great deal on the amount of cash...
Given the fact that Nike's cash and equivalents have doubled from $954 million in 2006 to $1,856 million in 2007, the company ability to pay its debts has significantly increased, making the company more financially stable.
The inventory turnover measures the company's efficiency. The values for 2006 and 2007 are quite similar for Nike, showing that there have not been significant changes in this aspects regarding cost of goods sold, on the one hand, and inventory, on the other hand. Also, this proves the company's financial stability.
Another ratio that had similar values for 2007 and 2006 in Nike's case is profit margin. This shows that the company has maintained its profitability level. This also means that the company is following a continuous strategy regarding the management of operating expenses.
The receivable turnover also measures the company's efficiency. This ratio depends mostly on the value of total net sales. Given the fact that this value has significantly increased in 2007 compared to 2006, this shows that Nike is on an ascending direction regarding its efficiency.
Reference List
Nike Inc. History and Heritage. Nike, 2007. Accessed 11 December, 2007. Available at http://www.nikebiz.com/company_overview/history/1950s.html.
Nike Inc. Wikipedia, the free encyclopedia. 2007. Accessed 11 December, 2007. Available at http://en.wikipedia.org/wiki/Nike,_Inc..
Nike Inc. Historical Price Lookup. 2007. Accessed 12 December, 2007. Available at http://phx.corporate-ir.net/phoenix.zhtml?c=100529&p=irol-stockLookup&t=HistQuote&control_firstdatereturned=.
Nike Inc. Annual Report. 2007. Accessed 12 December, 2007. Available at http://media.corporate-ir.net/media_files/irol/10/100529/Areports/ar_07/pdfs/Nike_AR_2007_10K.PDF.
Nike Inc. History and Heritage. Nike, 2007, accessed 11 December, 2007. Available at http://www.nikebiz.com/company_overview/history/1950s.html.
Nike Inc. Wikipedia, the free encyclopedia. 2007. Accessed 11 December, 2007. Available at http://en.wikipedia.org/wiki/Nike,_Inc..
Nike Inc. Historical Price Lookup. 2007. Accessed 12 December, 2007. Available at http://phx.corporate-ir.net/phoenix.zhtml?c=100529&p=irol-stockLookup&t=HistQuote&control_firstdatereturned=.
Reference List
Nike Inc. History and Heritage. Nike, 2007. Accessed 11 December, 2007. Available at http://www.nikebiz.com/company_overview/history/1950s.html.
Nike Inc. Wikipedia, the free encyclopedia. 2007. Accessed 11 December, 2007. Available at http://en.wikipedia.org/wiki/Nike,_Inc..
Nike Inc. Historical Price Lookup. 2007. Accessed 12 December, 2007. Available at http://phx.corporate-ir.net/phoenix.zhtml?c=100529&p=irol-stockLookup&t=HistQuote&control_firstdatereturned=.
Nike Inc. Annual Report. 2007. Accessed 12 December, 2007. Available at http://media.corporate-ir.net/media_files/irol/10/100529/Areports/ar_07/pdfs/Nike_AR_2007_10K.PDF.
Nike Inc. History and Heritage. Nike, 2007, accessed 11 December, 2007. Available at http://www.nikebiz.com/company_overview/history/1950s.html.
Nike Inc. Wikipedia, the free encyclopedia. 2007. Accessed 11 December, 2007. Available at http://en.wikipedia.org/wiki/Nike,_Inc..
Nike Inc. Historical Price Lookup. 2007. Accessed 12 December, 2007. Available at http://phx.corporate-ir.net/phoenix.zhtml?c=100529&p=irol-stockLookup&t=HistQuote&control_firstdatereturned=.
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