PROJECT

ON

BY

For

Submitted By:
NITISH KUMAR
KIRAN KUMARI
KOMAL RANJAN
PREETIKA RACHNA
2nd SEMESTER PRIYADARSHANI
RAKESH ANMOL TUTI

CONTENT:
 ACKNOWLEDGEMENT
 CERTIFICATE
 INTRODUCTION
 HISTORY
 COMPANY SPLIT
 TAPIE AFFAIR
 CORPORATE INFORMATION
 Adidas AG
 INTERESTING FACT ABOUT ADIDAS

 NUMERICAL EXAMPLE
 BALANCE SHEET
 CONCLUSION
 BIBLIOGRAPHY
 ACKNOWLEDGEMENT
“ MOVE WITH THE GROUP
WORK BECOME EASIER
MOVE ALONE
WORK BECOMES TOUGHER”

WE, THE STUDENTS INVOLVED IN THIS ASSIGNMENT,

OWE A DEBT OF GRATITUDE TO OUR FINANCIAL
MANAGEMINT FACULTY MR. RAJU KUMAR
DAS FOR PROVIDING US SUCH A LEARNING AND
EXCITING ASSIGNMENT ON “INVESTMENT
DECISION BY NPV & IRR”.
WE ALSO WANT TO ACKNOWLEDGE HOW MUCH WE
HAVE LEARNED FROM WORKING TOGETHER IN A
GROUP.

THANK YOU
 CERTIFICATE

THE PROJECT ENTERED IN THIS FILE HAVE

BEEN SATISFACTORILY PERFORMED BY
NITISH KUMAR, KIRAN KUMARI, KOMAL
RANJAN, PREETIKA RACHNA,
PRIYADARSHINI KUMARI, AND RAKESH
ANMOL TUTI pursuing bba 1st year from
CENTRAL UNIVERSITY OF JHARKHAND
DURING THE ACADEMIC YEAR 2010-2015.

Marks obtained-

Co-ordinator sign subject faculty

c.nagapawan r.k.das
remarks:

INTRODUCTION
Adidas AG is a German sports apparel manufacturer and
parent company of the Adidas Group, which consists of the
Reebok sportswear company, golf company (including
Ashworth), and Rockport. Besides sports footwear, the
company also produces other products such as bags, shirts,
watches, eyewear and other sports and clothing-related goods.
The company is the largest sportswear manufacturer in
Europe and the second biggest sportswear manufacturer in the
world, after its American rival Nike.
Adidas was founded in 1948 by Adolf "Adi" Dassler,
following the split of Gebrüder Dassler Schuhfabrik between
him and his older brother, Rudolf. Rudolf later established
Puma, which was the early rival of Adidas. Registered in
1949, Adidas is currently based in Herzogenaurach, Germany,
along with Puma.
The company's clothing and shoe designs typically feature
three parallel bars, and the same motif is incorporated into
Adidas's current official logo. The "Three Stripes" were
bought from the Finnish sport company Karhu Sports in the
1951.[4][5] The company revenue for 2009 was listed at €10.38
billion and the 2008 figure at €10.80 billion.

History

Adolf "Adi" Dassler started to produce his

own sports shoes in his mother's wash
kitchen in Herzogenaurach, Bavaria, after
his return from World War I. In 1924, his
brother Rudolf "Rudi" Dassler joined the business which
became Gebrüder Dassler Schuhfabrik (Dassler Brothers
Shoe Factory) and prospered. The pair started the venture in
their mother's laundry, but at the time, electricity supplies in
the town were unreliable, and the brothers sometimes had to
use pedal power from a stationary bicycle to run their
equipment.
By the 1936 Summer Olympics, Adi Dassler drove from
Bavaria on one of the world's first motorways to the Olympic
village with a suitcase full of spikes and persuaded U.S.
sprinter Jesse Owens to use them, the first sponsorship for an
African American. Following Owens's haul of four gold
medals, his success cemented the good reputation of Dassler
shoes among the world's most famous sportsmen. Letters from
around the world landed on the brothers' desks, and the
trainers of other national teams were all interested in their
shoes. Business boomed and the Dasslers were selling
200,000 pairs of shoes each year before World War II.
Late in World War II, the shoe factory shifted to production of
the Panzerschreck anti-tank weapon
Company split

Both brothers joined the Nazi Party, but Rudolf

was slightly closer to the party. During the war,
a growing rift between the pair reached a
breaking point after an Allied bomb attack in
1943 when Adi and his wife climbed into a
bomb shelter that Rudolf and his family were
already in: "The dirty bastards are back again," Adi said,
apparently referring to the Allied war planes, but Rudolf was
convinced his brother meant him and his family. After Rudolf
was later picked up by American soldiers and accused of
being a member of the Waffen SS, he was convinced that his
brother had turned him in.
The brothers split up in 1947, with

 Rudi forming a new firm that he called Ruda – from

Rudolf Dassler, later rebranded Puma,
 and Adi forming a company formally registered as adidas
AG (with lower case lettering) on 18 August 1949. The
acronym All Day I Dream About Sport, although
sometimes considered the origin of the adidas name, was
applied retroactively, which makes it a backronym. The
name is actually a portmanteau formed from "Adi" (a
nickname for Adolf) and "Das" (from "Dassler").
The Tapie affair
Bernard Tapie, a former French businessman who once
owned Adidas but has since relinquished his control
over the company due to debt
After a period of trouble following the death of Adolf
Dassler's son Horst Dassler in 1987, the company was
bought in 1989 by French industrialist Bernard Tapie,
for ₣1.6 billion (now €243.918 million), which Tapie
borrowed. Tapie was at the time a famous specialist of
rescuing bankrupt companies, an expertise on which he
built his fortune.
Tapie decided to move production offshore to Asia. He
also hired Madonna for promotion. He sent,
from Christchurch, New Zealand, a shoe sales
representative to Germany and met Adolf Dassler's
descendants (Amelia Randall Dassler and Bella Beck
Dassler) and was sent back with a few items to promote
the company there.
In 1992, unable to pay the loan interest, Tapie mandated
the Crédit Lyonnais bank to sell Adidas, and the bank
subsequently converted the outstanding debt owed
into equity of the enterprise, which was unusual as per
the prevalent French banking practice. Apparently,
the state-owned
state-owned bank had tried to get Tapie out of
dire financial straits as a personal favour to Tapie,
reportedly because Tapie was Minister of Urban Affairs
(ministre de la Ville) in the French government at the
time.
In February 1993, Crédit Lyonnais sold Adidas to Robert
Louis-Dreyfus, a friend of Bernard Tapie for a much
higher amount of money than what Tapie owed, 4.485
billion (€683.514 million) francs rather than 2.85 billion
(€434.479 million). Tapie later sued the bank, because
he felt "spoiled" by the indirect sale.
Robert Louis-Dreyfus became the new CEO of the
company. He was also the president of Olympique de
Marseille, a team Tapie had owned until 1993.

Tapie filed for personal bankruptcy in 1994. He was the

object of several lawsuits, notably related to match
fixing at the football club. During 1997, he served 6
months of an 18-month prison sentence in La
Santé prison in Paris. In 2005, French courts awarded
Tapie a €135 million compensation (about 886 million
francs).
 Corporate information
Current executive board

 CEO Adidas-group: Herbert Hainer

 Finance Adidas-group: Robin J. Stalker
 CEO Adidas brand: Erich Stamminger
 Global Operations Adidas-group: Glenn S. Bennett
Former management

 CEO (1993–2002): Robert Louis-Dreyfus.

Financial information
Financial data in millions of euros

Year 2006 2007 2008 2009 2010

Sales 10,084 10,299 10,799 10,381 11,990

EBITDA 1,078 1,165 1,280 780 1,159

Net results 483 551 642 245 567

Net debt 2,231 1,766 2,189 917 221

Adidas AG
Type Aktiengesellschaft
Traded as FWB:  ADS,Pink Sheets:  ADDYY
Industry Clothing  and  consumer goods  manufacture
Founded 1924 as  Gebrüder Dassler Schuhfabrik
[1]
(registered in 1949)
Founder(s) Adolf Dassler
Headquarters Herzogenaurach,  Germany
Area served Worldwide
Key people Herbert Hainer  (CEO)
Robin Stalker  (CFO)
Erich Stamminger  (CEO, Adidas Brand)
Igor Landau  (Chairman of thesupervisory board)
Products Footwear,  sportswear,sports equipment,  toiletries
Revenue €11.99 billion  (2010)[2]
Operating €894 million  (2010)[2]
income
Profit €567 million  (2010)[2]
Total assets €10.62 billion  (end 2010)[2]
Total equity €4.616 billion  (end 2010)[2]
Employees 42,540  (end 2010)[2]
Website adidas-group.com
Interesting Facts About Adidas
By Stephanie Fagnani, eHow Contributor
Adidas was founded by German native Adolf "Adi"
Dassler, who made his first shoe in 1920. In 1925,
 he designed the first cleat prototype for soccer and
track and field events. Since that time, the Adidas
company has become world-renowned for its
sports-related clothing items, which now include
sneakers, shirts, gym bags and watches, just to
name a few. The company's calling card is its
three-stripe trademark that appears on all
products.

1. Olympic Lineage
o Dutch athletes wore shoes made by Adi
Dassler during the 1928 Olympic Games in
Amsterdam, the Netherlands, the first time
Olympic athletes wore them to compete. In 1932,
German runner Arthur Jonath became the first
Olympic competitor to win a medal while wearing
Dassler shoes.
'Seinfeld' connection
Businessman Robert Louis-Dreyfus was named
president of the company in 1993 and proceeded
to implement new marketing campaigns that
boosted

o sluggish sales. He's the cousin of actress

Julia Louis-Dreyfus of "Seinfeld" fame. He died on
July 4, 2009, at the age of 63.
 Reebok Acquisition
o With permission from the European
Commission, Adidas acquired rival sportswear
maker Reebok for an estimated $3.8 billion in early
2006. Combined, the two entities represented
almost $12 billion in revenue at the time.

Fun Fact
o Hip hop group Run DMC recorded the
song "My Adidas" for the album "Raising Hell,"
which was released in 1986. Sample lyrics include
the line "Now the Adidas I possess for one man is
rare, myself, homeboy, got 50 pair."

Famous Ad Pitches
Celebrities who have endorsed Adidas products in
ads include tennis players Arthur Ashe and Anna

o Kournikova, soccer star David Beckham

and basketball star Kobe Bryant.

 Better Soccer
Coachingwww.bettersoccercoaching.com/Advice
 Free Soccer Coaching Drills, Skills Delivered to
you weekly. Free
 Shop House Of Hollandwww.shopfatal.com
Spring/Summer 2011 online now Past seasons to
80% off
 The Kolkata
Outletwww.GROUPON.sosasta.com/Shoes
Get Shoes & Accessoires for 70% Off in Kolkata.
Join the Group
 Rbk Speed Shoes @ Rs
1499www.BagItToday.com
Buy Reebok Speed Shoes worth worth Rs 2599
for Rs 1499 only
Stock Data: Recent Stock Performance:
13
1 Week 4.6%   17.7%  
Weeks
 

Current Price (4/29/2011):  37.39 4 Weeks 20.0%   52

(4/29/2011):  28.0%  
(Figures in 
in  U.S. Dollars)
Dollars) Weeks
 
adidas AG Key Data:

  Ticker: ADDYY Country: GERMANY

  Exchanges: FRA OTC Major Industry: Apparel & Textiles

Diversified Apparel
    Sub Industry:
Mfrs.

15,827,039,800
  2010 Sales (Year Ending Jan Employees: 42,541
2011).
  Currency: U.S. Dollars Market Cap: 15,645,186,389

Shares
  Fiscal Yr Ends: December 418,432,372
Outstanding:

Closely Held
  Share Type: Stammaktie 8,368,648
Shares:
Q. The cost of a project of adidas company is
Rs.25,000 and it generates cash inflows of Rs 9,000 ;
8,000; 7,000; 6,000; 5,000 through a project of 5
years.A required rate of return is assumed to be
10%.find out the NPV of the project?
SOLUTION:
YEAR CASH DISCOUNTED PRESENT
INFLOW (2) FACTOR AT VALUE OF
10%(3) CASH
INFLOW(2X3)
 1 9,000 0.9091 8,181

2 8,000 0.8204 6,608

3 7,000 0.7513 5,257

4 6,000 0.6830 4,098

5 5,000 0.6209 3,100

27,244

NPV= Present value of cash inflow – value of cash

outflow
= 27,244 – 25,000
=Rs 2,244

Comments: NPV of the project is positive, since the

present value of cash inflow of Rs 27,244 is greater
then present value of cash outflow of Rs 25,000. The
project will be accepted for investment.
Q.The cost of a project of adidas company is
Rs.32,400.It is expected to generate cash inflows of
Rs.16,000;Rs.14,000; and Rs.12,000,through its 3
years, life period.Calculate IRR of the project.

SOLUTION :
Calculation of IRR with TRIAL AND ERROR METHOD .
Let us try with 20%discounting factor.(Using table of
“PRESENT VALUE OF ONE RUPEES”)
YEA CASH DISCOUNTED PRESENT
R INFLOW FACTOR AT VALUE OF
(2) 20%(3) CASH
INFLOW(2X3)
1 16,000 0.833 13,328

2 14,000 0.694 9,716

3 12,000 0.579 6,948

29,692

Lets us try with 14% discounting factor

YEAR CASH DISCOUNTED PRESENT
INFLOW (2) FACTOR AT VALUE OF
15%(3) CASH
INFLOW(2X3)

1 16,000 0.870 13,920

2 14,000 0.756 10,584

3 12,000 0.658 7,896

 32,400

There fore IRR is 15%

Balance Sheet
View: Annual Data | Quarterly Data All numbers in thousands
Sep 30, Jun 30, Mar 31, Dec 31,
Period Ending
2010 2010 2010 2009
Assets
Current Assets
Cash And Cash Equivalents 571,000   594,000   388,000   775,000  
Short Term Investments 328,000   401,000   302,000   58,000  
Net Receivables 2,228,000   2,090,000   2,063,000   1,602,000  
Inventory 1,926,000   2,049,000   1,680,000   1,471,000  
Other Current Assets 470,000   507,000   478,000   296,000  
Total Current Assets 5,523,000   5,641,000   4,911,000   4,485,000  
Long Term Investments 153,000   217,000   166,000   107,000  
Property Plant and Equipment -  -  -  - 
Goodwill 1,521,000   1,610,000   1,530,000   1,478,000  
Intangible Assets -  -  -  - 
Accumulated Amortization -  -  -  - 
Other Assets -  -  -  - 
Deferred Long Term Asset Charges 473,000   463,000   428,000   412,000  
Total Assets 10,105,000   10,608,000   9,531,000   8,875,000  
Liabilities
Current Liabilities
 Accounts Payable 1,313,000   1,464,000   1,133,000   1,166,000  
Short/Current Long Term Debt 1,632,000   1,774,000   1,840,000   1,782,000  
Other Current Liabilities 1,080,000   1,023,000   902,000   899,000  
Total Current Liabilities 3,474,000   3,602,000   3,014,000   2,836,000  
Long Term Debt 1,363,000   1,482,000   1,533,000   1,579,000  
Other Liabilities -  -  -  - 
Deferred Long Term Liability
-  -  -  - 
Charges
Minority Interest -  -  -  - 
Negative Goodwill -  -  -  - 
Total Liabilities 5,611,000   5,879,000   5,277,000   5,104,000  
Stockholders' Equity
Misc Stocks Options Warrants -  -  -  - 
Redeemable Preferred Stock -  -  -  - 
Preferred Stock -  -  -  - 
Common Stock 209,000   209,000   209,000   931,000  
Retained Earnings 3,837,000   3,572,000   3,518,000   3,350,000  
Treasury Stock 448,000   948,000   527,000   (510,000)
Capital Surplus -  -  -  2,000  
Other Stockholder Equity -  -  -  - 
Total Stockholder Equity -  -  -  - 
Net Tangible Assets -  -  -  - 

Currency in EUR.
 CONCLUSION

INVESTMENT DECISION THOUGH TAKEN BY

INDIVIDUAL CONCERN IS OF NATIONAL
IMPORTANCE BECAUSE IT DETERMINES
EMPLOYMENT, ECONOMICS ACTIVITIES AND
ECONOMICS GROWTH.
THE LONG TERM INVESTMENT DECISIONS
ARE DIFFICULT TO BE TAKEN BECAUSE:-
 DECISION EXTENDS TO A SERIES OF
YEARS BEYOUND THE CURRENT
ACCOUNTING PERIOD
 UNCERTAINITIES OF FUTURE
 HIGHER DEGREE OF RISK
AT LAST WE WANT TO CONCLUDE THAT WE,
THE STUDENTS INVOLVED IN THIS
ASSIGNMENT, HAVE PUT OUR FULL EFFORT IN
MAKING THIS ASSIGNMENT SUCCESSFUL.

BIBLIOGRAPHY

FOLLOWING BOOKS AND WEBSITES WERE

TAKEN AS REFERENCE S WHILE WORKING
ON THE ASSIGNMENT ON “INVESTMENT
DECISION BY NPV & IRR”
 WWW.GOOGLE.COM
 WWW.WIKIPEDIA.COM

 FINANCIAL MANAGEMENT-SASHI
GUPTA,R.K SHARMA
 FINANCIAL MANAGEMENT-I.M. PANDEY