ALUE-NIKE, INC.
Selected data from Nike's financial statements for the period 2007-2011 follow:
Item 6 Selected Financial Data (In Part)
Required
a. Liquidity
1. Review the summary analysis for Nike, Inc. from 2009-2011. Give your opinion of the liquidity position (refer back to Exhibit 3, Summary Analysis).
2. Review the current ratio in this case (2007-2011). Comment.
3. Review cash provided by operations (2007-2011). Comment.
b. Long-term debt-paying ability
1. Review the summary analysis for Nike, Inc. from 2009-2011. Give your opinion of the debt position (refer back to Exhibit 3, Summary Analysis).
2. Review the debt ratio for 2009-2011. Comment.
c. Profitability
1. Review the summary analysis for Nike, Inc. from 2009-2011. Give your opinion of the profitability (refer back to Exhibit 3, Summary Analysis).
2. Review the trend in revenues (2007-2011). Comment.
3. Review the trend in gross profit margin (2007-2011). Comment.
d. Investor Analysis
1. Review the absolute amount and trend in the price/earnings for 2007-2011. Considering liquidity, debt, and profitability, is there a reasonable probability that the price/earnings may increase?
2. Comment on the trend in market capitalization (2007-2011) (share price x number of outstanding shares).
3. Review cash dividends declared per common share (2007-2011). Is there a likely chance that dividends will be increased during the year ending May 31, 2012?
4. Give your opinion of the stock price of Nike, Inc. on May 31, 2013. In practice, many things would be considered that are not presented in this case. Base your opinion on the summary analysis (2009-2011) and the financial history (2007-2011).
e. Other
1. This case has used a fundamental financial statement approach to valuing Nike. In your opinion, would an analyst likely use this type of approach for valuing Nike? Comment.