Question

Financial Statement Analysis The financial statements for Nike, Inc., are presented in Appendix C at the end of text. The following additional information in thousands is available: Accounts receivable at May 31, 2010 $ 3,138 Inventories at May 31, 2010 2,715 Total assets at May 31, 2010 14,998 Stockholders'equity at May 31, 2010 9,843 Instructions 1. Determine the following measures for the fiscal years ended May 31, 2013 (fiscal 2012), and May 31, 2012 (fiscal 2011), rounding to one decimal place. a. Working capital b. Current ratio C. Quick ratio d. Accounts receivable turnover e. Number of days' sales in receivables f. Inventory turnover g. Number of days' sales in inventory h. Ratio of liabilities to stockholders' equity i. Ratio of sales to assets

Answer 1

2013 2012 Current Assets Less current Liabilities Working Capital = 13,626 (3,926) 9,700 11,845 (3,882) 7,963 Current ratio = Current Assets Current Liabilities 13,626 3,926 11,845 3,882 3.5 3.1 Acid-test (Quick) Ratio Current Assets - Inventory - Prepaid Expenses Current Liabilities 9,390 3,926 7,766 3,882 2.4 2.0 Accounts Receivable Turnover Net Credit Sales Average Receivables 23331 (3117+3132)/2 25313 (3132+3138)/2 25313 3124.5 23331 3135 8.1 7.4

Number of days' sales in receivables 365 365 8.1 365 7.4 Accounts Receivable Turnover 49 days Inventory Turnover Cost of Goods Sold Average Inventory 13183 14279 (3222+2715)/2 (3434+3222)/2 14279 3328 13183 2968.5 Inventory Turnover 4.3 4.4 Times Days in Inventory 365 365 4.3 365 4.4 InventoryTurnover Number of Days to sell Inventory 82 Days

Ratio of Liabilities to Stockolder's Equity Liabilities Stockholder's Equity 3926+1210+1292 3882+228+974 11156 10381 6428 11156 5084 10381 Ratio of Liabilities to Stockolder's Equity 0.6 0.5 Assets Turnover Net Sales Average Assets 25313 23331 (15465+14998)/2 (17584+15465)/2 25313 16524.5 23331 15231.5 Asset Turnover 1.5 1.5 Times

Return on Assets Net Earnings Average Total Assets 2485+23 (17584+15465)/2 2223+31 (15465+14998)/2 2508 16524.5 2254 15231.5 Return on Assets 15.2% 14.8% Return on Common Stock holder's Equity Net Income Average Total Stockholder's Equity 2485 2223 (10381 +9843)/2 (11156 +10381)/2 2485 10768.5 2223 10112 Return on Common Stock holder's Equity 23.1% 22.0% Price Earning Ratio Market Price Per Share Earnings Per Share 61.66 2.75 53.1 2.47 Price Earning Ratio 22.4 21.5

Percentage relationship of net income to sales Net Income Sales 2485 25313 2223 23331 Percentage relationship of net income to sales 9.8% 9.5%