Question

Casework should be submitted according to the course schedule in the Moodle course using the assignment submit link. Use the provided annual report for Nike, Inc. This report and its Consolidated Statements of Income and Consolidated Balance Sheets will serve as your primary resource for completing the casework. Perform a horizontal analysis a(refer to Chapter 17) of the income statement and balance sheet using only the years 2014 and 2013 in Nike, Inc.’s format. A template has been provided for you (scroll down to locate all four statements). Only the gray-shaded areas of the template must be completed by filling in the correct data and making the appropriate calculations. Although not a requirement, you are encouraged to use Excel formulas to complete the assignment.

https://s1.q4cdn.com/806093406/files/doc_financials/2014/docs/nike-2014-form-10K.pdf

Year Ended May 31,	VERTICAL
(In millions, except per share data)
	2014		%		2013		%
Income from continuing operations:
Revenues
Cost of sales
Gross profit
Demand creation expense
Operating overhead expense
Total selling and administrative expense
Interest expense (income), net (Notes 6, 7, and 8)
Other expense (income), net (Note 17)
Income before income taxes
Income tax expense (Note 9)
NET INCOME FROM CONTINUING OPERATIONS
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS
NET INCOME

Answer 1

NIKE Inc, Consolidated Statement of Income
Year Ended May 31	VERTICAL
(In millions, except per share data)
	2014	%	2013	%
Income from continuing operations:
Revenues	27,799	100.0%	25,313	100.0%
Cost of sales	15,353	55.2%	14,279	56.4%
Gross profit	12,446	44.8%	11,034	43.6%
Demand creation expense	3,031	10.9%	2,745	10.8%
Operating overhead expense	5,735	20.6%	5,051	20.0%
Total selling and administrative expense	8,766	31.5%	7,796	30.8%
Interest expense (income), net (Notes 6, 7, and 8)	33	0.1%	-3	0.0%
Other expense (income), net (Note 17)	103	0.4%	-15	-0.1%
Income before income taxes	3,544	12.7%	3,256	12.9%
Income tax expense (Note 9)	851	3.1%	805	3.2%
NET INCOME FROM CONTINUING OPERATIONS	2,693	9.7%	2,451	9.7%
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS	-		21	0.1%
NET INCOME	2,693	9.7%	2,472	9.8%
Note
Percentages are in proportion of Revenues
For e.g. Cost of Sales (2014) = 15353/27799 = 55.2%