Vertical Analysis Of Nike

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ncome statement:

In order to analysis the financial statement thoughtfully, we apply the horizontal analysis technique to find out the significant change in dollar amount and percentage grow rate. From the income statement vertical analysis below (table 1), we could compare a series of financial statement data over a period of time. Sales revenue increase by around 10% from 2013 to 2014. If excluding the currency change, revenue from NIKE Company’s continuing operations grew 11 % for the fiscal year 2014. From the table 2, it provide the revenue structure of NIKE. The table demonstrates the 11% growth rate in sale revenue are driven by both the NIKE Brand and Converse. On a currency neutral basis, NIKE brand footwear and apparel revenue increased
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The accrued marketing and advertising change from 77 million to 133 million, causing 73% of growth rate in this account. The major reason for growth would be attributed to the World Cup in Brazil. Nike leaded up the world up by launching 10 team kits that achieving new landmark in performance and sustainability.
The Vertical analysis give us the statistics data that 41.79% of total asset is financed by non-owner while 58.21 % of total asset is financed by owner. Compare to the data from 02013, NIKE Inc. tends to increase its financial leverage. The ratio of debt to total asset increased from 33.84% to 41.87%. The higher the percentage indicating more leverage and higher risk for NIKE company.
Income tax payable increase 414.29%? Link to table 9? Total income tax increase from 2012 to 2014 lead to the income tax payable
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It also shows how these cash link the ending balance to the beginning balance shown on the company’s statement of financial position. From the statement of cash flow (table 10), we know that NIKE’s cash from operation of fiscal 2014 is positive $3003 million compare to that of fiscal 2013 which is positive $2968 million. NIKE’s fundamental source of cash from operating activating is net income which is $2963 million for fiscal 2014 and $2472 million for fiscal 2013. NIKE uses indirect method to calculate the cash flow from operating activities. From table 11, we see that the net change in working capital was a new cash outflow of $78 in fiscal 2013 to $488 in fiscal 2014. Because slow growth in inventory was driven by continue increasing in inventory productivity in 2013, higher inventory level was generated in 2014 to support higher future orders. What’s more, in 2013, there was a reduction in account receivable driven by the collection of receivable related to the discontinue operation—Umbro and Cole Haan. In 2014, the account receivable increase, indicating increase in sales. Higher increase in prepaid marketing expense reflected the preparation of World Cup. The increases in account payable, accrued liabilities and income taxes payable balanced the increase in working capital outflow to some

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