THAI NGUYEN UNIVERSITY

INTERNATIONAL SCHOOL

FINAL EXAMINATION REPORT

TITLE :

FINANCIAL DATA ANALYSIS OF NIKE COMPANY

This submitted to

Lecturer: Nguyen Mai Phuong

The Department of Economics and Management

International School of Thai Nguyen University

In Partial Fulfillment

Of the Financial Data Analysis

By

Hoang Thi Hang

Hoang Anh Duc

Ngo Hoai Ngoc

Nguyen Thi Ha

Nguyen Huy Phuc

Ngo Thi Thuy Quynh

1
I, An Overview of Nike
1.1. General introduction

- Nike, Inc. (stylized as NIKE) is an American athletic footwear and apparel corporation headquar
tered near Beaverton, Oregon, United States. It is the world's largest supplier of athletic shoes and
apparel and a major manufacturer of sports equipment, with revenue over US$46 billion in its fisc
al year 2022.

- The company was founded on January 25, 1964, as "Blue Ribbon Sports", by Bill Bowerman an
d Phil Knight, and officially became Nike, Inc. on May 30, 1971. The company takes its name fro
m Nike, the Greek goddess of victory. Nike markets its products under its brand, as well as Nike
Golf, Nike Pro, Nike+, Nike Blazers, Air Force 1, Nike Dunk, Air Max, Foamposite , Nike Skateb
oarding, Nike CR7, and subsidiaries including Air Jordan and Converse (brand). Nike also owned
Bauer Hockey from 1995 to 2008 and previously owned Cole Haan, Umbro, and Hurley Internatio
nal. In addition to manufacturing sportswear and equipment, the company operates retail stores un
der the Niketown name. Nike sponsors many high-profile athletes and sports teams around the wo
rld, with the highly recognized trademarks of "Just Do It" and the Swoosh logo.

- The company's headquarter is in the Portland metropolitan region, close to Beaverton, Oregon.
- The business made over $36 billion in profit in 2018 thanks to remarkable expansion. The Nike
brand has the highest worth among sports goods brands, with a valuation of around $30 billion.
In addition to holding 48% of the US market for athletic sports shoes, Nike stands out as the
industry leader with 96% of the market for basketball sports shoes.
- The company employed over 73,100 people globally in 2018, and every one of them gave their
strength to help the brand achieve its goal of inspiring and innovating for every cause worldwide
inspiration.
- Nike came in at number 89 on the 2018 Fortune 500 list, which lists the biggest American
companies according to total sales.
- Mission: "Bringing inspiration and innovation to every athlete" is the mission the Nike brand is
aiming for. With quality products and effective marketing strategies, Nike has been affirming its
irreplaceable position in the fashion market in general and the sports fashion industry in particular.
- Vision: Passion for overcoming limits and making a difference

- Nike's vision is to become a leading global sports brand. They want to inspire and bring fighting
spirit to people through their products and services.

- Through promoting sports performance and creating outstanding products, Nike aims to promote
healthy living and explore unlimited human potential. With the perfect combination of style and
performance, Nike has established its position as one of the world's leading footwear brands. With
a variety of designs, materials and technology, Nike always meets all your needs.

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1.2) SWOT

Strengths:

1. Strong Brand Identity: Nike is one of the most recognizable and valuable sportswear brands
globally, known for its "swoosh" logo and iconic tagline, "Just Do It." Its brand equity and
reputation give it a competitive advantage.

2. Product Innovation: Nike is renowned for its continuous product innovation, incorporating
cutting-edge technology and design into its footwear, apparel, and equipment. This positions the
brand as a leader in the industry and attracts consumers seeking high-performance products.

3. Global Presence: Nike has a vast and well-established global presence, with a strong
distribution network spanning multiple countries. This allows the brand to reach a wide customer
base and capitalize on international markets.

4. Strong Sponsorship and Endorsements: Nike has successfully partnered with high-profile
athletes, sports teams, and celebrities, leveraging their influence to promote its products. These
endorsements enhance brand visibility and credibility among target audiences.

Weaknesses:

1. Controversies and Ethical Concerns: Nike has faced criticism and controversies in the past
related to labor practices in its supply chain, particularly in overseas manufacturing facilities.
These issues can negatively impact the brand's reputation and consumer perception.

2. Premium Pricing: Nike products often carry premium price tags compared to competitors.
While this reflects the brand's quality and image, it may limit access to certain customer segments
with more price-sensitive preferences.

3. Dependency on Third-Party Manufacturers: Nike outsources its manufacturing to third-party

contractors, which can lead to challenges in quality control and supply chain management. This
dependence introduces risks related to production delays, labor issues, or potential disruptions.

Opportunities:

1. Growing Sportswear Market: The global sportswear market continues to expand, driven by
increased health consciousness, athleisure trends, and growing participation in sports and fitness

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activities. Nike can capitalize on this growth by introducing new products and targeting emerging
markets.

2. E-commerce Expansion: The rise of e-commerce provides opportunities for Nike to expand its
online sales channels and reach a broader customer base. Investing in digital marketing, online
platforms, and direct-to-consumer strategies can enhance customer engagement and sales.

3. Sustainability and Social Responsibility: There is a growing demand for sustainable and
ethically produced products. Nike can seize this opportunity by further improving its sustainability
practices, reducing its environmental footprint, and addressing labor concerns to appeal to socially
conscious consumers.

Threats:

1. Intense Competition: The sportswear industry is highly competitive, with rival brands such as
Adidas, Under Armour, and Puma vying for market share. Intensifying competition can impact
Nike's sales, pricing power, and market position.

2. Counterfeit Products: Nike's strong brand presence makes it susceptible to counterfeit products,
which can undermine brand value, customer trust, and revenues.

3. Economic Factors: Economic fluctuations, currency exchange rates, and global economic
conditions can impact consumer spending patterns and demand for Nike's products. Economic
downturns or recessions may result in reduced consumer purchasing power.

4. Changing Consumer Preferences: Shifts in consumer preferences, fashion trends, or a decline in

the popularity of certain sports can pose challenges for Nike to adapt its product offerings
accordingly.

1.3 ) Competitive Forces

II) ROA, ROE , Financial Leverage

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 ROE,ROA

50
45
40
35
30
25
20
15
10
5
0
2021 2022 2023

ROA ROE

*ROA
In 2022, the increase of (0.82) units compared to 2021 is equivalent to an increase of 0.05
(%) . An ROA that rises over time indicates the company is doing a good job of increasing its
profits with each investment dollar it spends
In 2023, the decrease of (2.53) units compared to 2021 is equivalent to an decrease of
0.16 (%) .A falling ROA indicates the company might have over-invested in assets that have
failed to produce revenue growth, a sign the company may be trouble.
*ROE
In 2022, the increase of (2.27) units compared to 2021 is equivalent to an increase of 0.05
(%) . ROE is higher when there is more debt and less equity for a given level of
assets. Trade off-greater debt means higher risk for the company.

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 In 2023, the decrease of (6.96) units compared to 2022 is equivalent to an decrease of
0.16 (%) . ROE is lower when there is less debt and more equity for a given level of assets. Less
debt means lower risk for the company

III) Horizotal

1) Total assets:

+In 2022, the increase of (2,581,000) $ compared to 2021 is equivalent to an increase of 6.83 (%)
.

+In 2023, the decrease of 2.790.000$ compared to 2021 is equivalent to a decrease of 6.91 (%) .

2) Total liabilities :

+ In 2022 compared with 2021 : equal

+ In 2023, the decrease of 1.446.000$ compared to 2021 is equivalent to a decrease of 5.79 (%) .

3) Total equity:

+ In 2022, the increase of 2.514.000$ compared to 2021 is equivalent to an increase of 0.19 (%) .
+ In 2023, the decrease of 1.277.000$ compared to 2021 is equivalent to a decrease of 8.36 (%) .

IV) RATIO

 Liabilities–to–equity ratio
Total liabilities
Liabilities–to–equity ratio = '
Stockholder s equity
From the above formula, we obtain the liabilities–to–equity ratio calculation
results for Nike's 3 years (2021, 2022, and 2023) as follows:
2021 2022 2023
Total liabilities 24,973,000 25,040,000 23,527,000

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 Stockholders’equity 12,767,000 15,282,000 14,004,000
Liabilities–to–equity 1.96 1.64 1.68
ratio

The liabilities-to-equity ratio is used to gauge the company’s ability to pay its
obligations. It shows the overall health of a particular company. Nike's liabilities-to-
equity ratio in 3 years (2021, 2022, and 2023) is all below 2.0; this is a good ratio.
Nike's liabilities-to-equity ratio in 2021 is 1.96, the highest ratio in the 3 years from
2021 to 2023, showing that the company has borrowed more capital from the market
to finance its operations than in 2022 and 2023. In 2022, the liabilities-to-equity ratio
of 1.64 shows that the company is using its assets and borrowing less money from the
market compared to 2021. This ratio has increased from 1.64 in 2022 to 1.68 in 2023.
The increase rate is not significant but still shows that Nike has borrowed more capital
from the market to finance its business activities.

 Current ratio
Current ratio formula:
Current assets
Current ratio =
Current liabilities
The current ratio calculation findings for Nike's three years (2021, 2022, and 2023)
are as follows:
2021 2022 2023
Current assets 26,291,000 28,213,000 25,202,000
Current liabilities 9,674,000 10,730,000 9,256,000
Current ratio 2.72 2.63 2.72

The current ratio compares all of a company’s current assets to its current
liabilities. Nike's current ratio for the three years 2021, 2022, and 2023 is all in the
range of 1.5 times to 3.0 times, which is considered healthy. This means that if all of
Nike's current liabilities were immediately due, the company could pay all of its bills
without leveraging long-term assets.
In 2021 and 2023, Nike has an equal current ratio of 2.72, showing that the
company's ability to pay off current liabilities is the same in these two years. In 2022,
Nike's current ratio is slightly lower at 2.63. This shows that Nike has a lower ratio of
current assets to current liabilities than in 2021 and 2023. The company's ability to
pay off all its current liabilities in 2022 is lower than it could be to pay off all the
company's current liabilities in 2021 and 2023.
 Total debt -to equity = total debt / total equity

2021 2022 2023

Total debt 12,813,000 12,627,000 12,144,000

Total equity 12,767,000 15,281,000 14,004,000

Total debt - to equity 1.00 0.82 0.87

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 Quick ratio = (Cash + marketable securities + accounts receivable )/ current liabilities

2021 2022 2023

Cash 9,889,000 8,574,000 7,441,000

Marketable 0 0 0
securities

Account receivable 4,463,000 4,667,000 4,131,000

Current liabilities 9,674,000 10,730,000 9,256,000

Quick ratio 1,48 1,23 1,25

V. RNOA ,NOA,NOPAT,Time interested

2021 2022 2023

RNOA 9.442 10.71 11.086
NOPAT 58.136 66.082 68.043
NOA 4.029 7.861 6.621
Time interest
-24.42 -31.44 1.035
earned

=>Compare each years of RNOA ,NOA,NOPAT,Time interested

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  RNOA

RNOA evaluates operating income a company derives relative to the operating assets it
holds. An increasing RNOA means that a company is deriving more and more profit out
of its operating assets.
+ In 2022, the increase of (1.258) units compared to 2021 is equivalent to an increase
of 13.43 (%) . RNOA of NIKE in 2022 is higher than in 2021 means that Nike is
deriving more and more profit out of its operating assets.

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 + In 2023, the Increase of (0.35) units compared to 2022 is equivalent to an increase
of 3.51(%) .An increasing RNOA means that a company is deriving more and more
profit out of its operating assets .
 NOA

NOA is a financial metric that measures the operating assets of a company minus its
operating liabilities.
+ In 2022, the increase of (3.832) units compared to 2021 is equivalent to an increase
of 95.11(%).The NOA for the years 2021-2022 that the information provided
indicates that the company's operating assets have been decreasing over time and
shows that this is not the right time to invest.
+ In 2023, the decrease of (1.24) units compared to 2022 is equivalent to an decrease
of 15.77(%) .The NOA for the years 2022-2023 that the information provided
indicate that the company's operating assets have been increasing over time. This
suggests that the company has been generating more revenue or profits over the years,
which is a great sign for investors.

 NOPAT

NOPAT or Net Operating Profit after Tax is a profitability measure in which a company’s
profit is calculated excluding the effect of leverage by assuming that the company does
not have any debt in its capital and, in turn, ignores the interest payments and the tax
advantage which companies get by issuing debt in their capital.

+ In 2022, the increase of (7.946) units compared to 2021 is equivalent to an increase

of 13.67 (%) . NOPAT of NIKE in 2022 is higher than in 2021 means is a
profitability measure in which a company’s profit is calculated excluding the effect of
leverage by assuming that the company does not have any debt in its capital .
+ In 2023, the Increase of (1.961) units compared to 2022 is equivalent to an increase
of 4(%) .An increasing NOPAT means a company is making more and more profit
than after taxes.
 Times interest earned

The interest rate earned times ( -24.42, -31.44, 1.035 ) shows that at the time of 2021,
2022, 2023, Nike Company's profit before tax and interest is higher (-24.42, - 31.44,
1,035) times compared to the Company's interest expense. From there, it shows that

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the Company is operating and using loan capital ineffectively (2021-2022) and has
not well controlled interest costs, thereby creating little profit from production and
business activities. But by 2023 tend to increase and control interest costs well,
creating positive growth.
=> Total debt to equity in the three years 2021, 2022, 2023 is greater than 1, meaning
the company has more debt than capital, creating high risk.
VI. Profitability and Productivity
 Profitability:
Profitability 2021 2022 202
Gross profit margin 3.486 3.553 4.397
Operating Expense Margin 6.514 6.662 8.935
Profit margin 1.163 1.100 1.223

The chart of Profitability

Based on the results in the table above and the chart, it can be seen that NIKE
Company's profitability indexes in 2023 are highest compared to 2021 and 2022, with
the difference not too large.
 gross profit margin:
+ In 2021 and 2022, the difference is only about 0.67, while in 2022 and 2023 the
difference is larger than 2021 with 0.844
 Operating Expense Margin
+ In 2021 and 2022 the difference is only about 0.148 while in 2022 and 2023 the
difference is larger than 2021 with 2.273

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 Profit margin:
+ The index does not differ too much between 2021 and 2022 with 0.063. Even from
2022 to 2023, the difference is only 0.123.

 Productivity:
 Accounts receivable turnover

 Inventory turnover

 Accounts payable turnover

 Cash conversion cycle

 PPE turnover

 Total liabilities to equity

VII. Conclusion

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