The SEC Form 10-K of NIKE is reproduced in Appendix C.
REQUIRED:
Review the NIKE SEC Form 10-K, and answer the following questions.
a. What is working capital, and what is the trend in NIKE's working capital position in recent years?
b. How much did working capital change as a percentage of total assets over that time period?
c. What happened to NIKE's current ratio over the last year? What accounted for the change?
d. What are the most important current liabilities reported by NIKE?
e. Compute NIKE's accounts payable turnover (see Chapter 5) for the past two years. Comment on any change. (Note: The accounts payable at the end of 2007 totaled $1,040.3)
f. Is NIKE concerned with any major contingencies (see note 15)?
g. Briefly describe the five largest accrued liabilities, and the basic form of the entry lending to their recognition on the balance sheet.
h. (Appendix 10A). What kind of pension plan does NIKE provide for its employees? How much did the company contribute to the plan in the last three years?
i. (Appendix 10B). Compute NIKE's conservatism ratio over the last three years. Comment on whether the company's financial reporting was conservative or aggressive across the three-year period.