Question

Name of the company: NIKE INC.

BALANCE SHEET

Report date : MAY 31,2019 & 2018

a. Answer the following questions. Use complete sentences, and explain your answers by reference to the information you gained from the vertical and horizontal analysis.

(1) In which assets does the company have the most significant investment?

(2) Which assets had the most significant increase/decrease during the two-year period.

(3) Is the company financially primarily with debt or equity?

(4) Is the debt primarily short-term or long-term?

Debt is primarily long-term.

(5) Did the company increase/decrease its outstanding debt during the two-year

        period and by what percent.

(6) Evaluate the company’s debt-paying ability. Refer to the information

        obtained in the vertical and horizontal analysis and the previous questions.

Nike Inc.
Balance Sheet for the Twelve Months Ended May 31
			Increase (Decrease) during 2019
Particulars	2019	2018	Amounts	%
Cash & equivalents	4,466,000	4,249,000	217,000	5.11
Short-term investments	197,000	996,000	(799,000)	(80.2)
Accounts receivable, net	4,272,000	3,528,000	744,000	21.1
Inventories	5,622,000	5,261,000	361,000	6.86
Prepaid expenses & other current assets	1,968,000	1,130,000	838,000	74,16
Total current assets	16,525,000	15,134,000	1,391,000	9.19
Total property, plant & equipment, gross	9,469,000	8,891,000	578,000	6.5
Less: accumulated depreciation	4,725,000	4,437,000	288,000	6.5
Property, plant & equipment, net	4,744,000	4,454,000	290,000	6.5
Identifiable intangible assets, net	283,000	285,000	2,000	0.7
Goodwill	154,000	154,000	0	0
Deferred income taxes & other assets	2,011,000	2,509,000	(498,000)	(19.85)
Total assets	23,717,000	22,536,000	1,181,000	5.24
Current portion of long-term debt	6,000	6,000	0	0
Notes payable	9,000	336,000	(327,000)	(97.32)
Accounts payable	2,612,000	2,279,000	333,000	14.61
Accrued liabilities	5,010,000	3,269,000	1,741,000	53.26
Income taxes payable	229,000	150,000	79,000	52.6
Total current liabilities	7,866,000	6040,000	1,826,000	30.23
Corporate bond payables	3,461,000	3,459,000	2,000	0.06
Total long-term debt	3,470,000	3,474,000	(4,000)	(0.12)
Less: current maturities	6,000	6,000	0	0
Long-term debt	3,464,000	3,468,000	(4,000)	(0.12)
Deferred income taxes & other liabilities	3,347,000	3,216,000	131,000	4.07
Class B common stock	3,000	3,000	0	0
Retained earnings	1,643,000	3,517,000	(1,874,000)	(53.9)
Total shareholders' equity	9,040,000	9,812,000	(772,000)	(7.87)
Total of liabilities & shareholders' equity	23,717,000	22,536,000	1,181,000	5.24

Answer 1