Nike Financial Analysis

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The financial standing of the company Nike, Inc. has steadily increased from the year 2014 to the year 2015. This is evident through looking at the financial ratios. Each of the ratios use values that are taken from a company’s financial statements: income statement, balance sheet, and the statement of cash flows. The ratios quantify different aspects of the business and are crucial when looking at the financial state of the company. One area to look when examining the financial standing of Nike is to look at the profitability ratios. The profitability ratios are ratios that can be used to assess a company’s ability to generate revenue as compared to the company’s expenses. When looking at the profitability ratios the first thing is gross …show more content…

The asset activity ratios take a look at Nike’s ability to convert different accounts into cash or through sales. The asset activity ratios are used to measure Nike’s relative efficiency of based on its use of its assets. The first ratio to look at is the inventory turnover ratio which shows how many times a company’s inventory is sold and then replaced over a set period. From 2014 to 2015 Nike saw a slight drop by about .08% in how much inventory is sold and then replaced. The next ratio to look at is the total asset turnover. The total asset turnover saw a drop of .013%, indicating that Nike has lost some of its efficiency to use the assets it has to generate sales and income revenue for the company. The last asset activity ratio to look at is the average collection period. From 2014 to 2015 Nike saw a drop by 95.51 days. The drop of 95.51 days demonstrates that in 2015 is more quickly receiving payments that are owed to them from businesses than in …show more content…

When looking at the market share globally, Nike owns more than other large companies such as Adidas, there closet competitor. An example of this comes from the chart on the next page (Bain, 2015). Nike controls 20.8% of the market share in an area that is one of the main revenue sources, sports footwear. Secondly, even though the Nike is close to fellow competitor Adidas, it is an area that is continuously growing for Nike. Moreover, Nike owing the market share is even more evident when looking at the market shares for the United

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