Nike Company

Financial Statement Analysis of COMPANY NAME
All information in this report is taken from the 10K Report of COMPANY NAME:
https: COMPANY NAME
Stockholder’s Letter

1. Who wrote the letter? What is this person’s title?
2. In 100 words or less summarize the basic message in the letter.
   Financial Highlights
3. Does your company present any financial highlights in the annual report? If not, access a recent post with financial highlights.
4. What items are highlighted?
5. Do these highlight items present the company in a positive, mixed or negative way? Explain.
6. Were there any items you think that should have been included in the company’s list that were omitted? If so, what were they?
   Fiscal Year
7. What is the company’s fiscal year? Where did you find this information?
8. Explain why the company has chosen this time period for its fiscal year.
   Balance Sheet
9. What time periods/dates does this company’s balance sheet cover?
10. What is the balance sheet equation (accounting equation) for the most recent year? (Use the totals for each category of total assets, total liabilities, and total stockholder’s equity.)
11. In terms of dollars, what are the three largest assets on the most recent balance sheet? (Item and amount)
12. Is the make-up of assets consistent with what you would expect to see for this type of company? Why or why not?
13. In terms of dollars, what are the three largest liabilities on the most recent balance sheet? (Item and amount)
14. Which amount is larger for the most recent year, paid in capital or retained earnings? (Item and amount)
15. Convert the balance sheet for each year into a common size balance sheet, complete in Excel.
16. What is the percentage of current assets to total assets for each year?
17. What is the percentage of current liabilities to total assets for each year?
18. What is the percentage of total liabilities to total assets for each year?
19. Did the percentage of total debt to total assets increase, decrease or stay the same? What do these numbers say about the company?
20. What is the percentage of stockholders’ equity to total assets for each year?
21. Compute the current ratio for each fiscal year. What do these numbers say about the company?
22. Does the company’s common stock have a par value? If so, how much was the reported par value per share?
23. How many shares of common stock were issued at the end of each fiscal year?
24. Does the company have any treasury stock?
25. Does the company have any preferred stock?
    Income Statement
26. Using the totals for income and expenses, what is the income statement equation for the most recent year?
27. What time periods/dates does this company’s income statement cover?
28. What amount of net sales is reported for each year?
29. What is the percentage change in sales for each year? Describe the trend in revenues.
30. What amount of net income is reported for each fiscal year?
31. What is the percentage change in net income for each year? Which is changing faster, sales or net income?
32. What three expenses are largest in terms of dollars on the most recent income statement? (Item and amount)
33. Convert the income statement to a common size income statement, complete in Excel.
34. If the company sells products, compute the gross margin and the gross margin percentage for each fiscal year?
35. What is the amount of operating income for each year?
36. What is the operating income as a percentage of sales for each year? Describe the trend in operating income.
    Statement of Cash Flows
37. Using the totals for each category (operating, investing, financing), what is the cash flows equation for the most recent year?
38. Does the company report cash flows from operating activities using the direct or the indirect method? Describe how you can tell.
39. Does the ending balance of cash and cash equivalents agree with the amount reported on the balance sheet?
40. On what statement(s) would you expect to find information regarding the declaration and payment of dividends? Did the company declare or pay dividends in any year? If so, when and how much?
41. Describe the trend in cash flows from financing activities.
    Statement of Changes in Stockholders’ Equity
42. Using the amounts from the statement of changes in stockholders’ equity, what is the equation for changes in retained earnings for the most recent year?
    Notes to the Financial Statements
43. How many notes to the financial statements are presented for the most recent year?
44. The first note to the financial statements lists and describes significant accounting policies. Identify and summarize two accounting policies.
45. Choose two of the notes to the financial statements and briefly summarize them.
    Report of Independent Public Accountants (Auditors)
46. What accounting firm audited the company’s financial statements?
47. What is the auditor firm’s responsibility with respect to auditing them?
48. What type of opinion did the independent auditors issue on the financial statements (Unqualified, Qualified, Disclaimer of Opinion, Adverse)? What does this opinion mean?
49. The auditor firm should have investigated the internal control system of the company. Describe what is communicated in the letter reporting on this investigation. What was the auditor’s opinion on the internal control system?
    Management’s Discussion and Analysis (MD & A)
50. Provide a description (200-300 words) of the MD & A.
    References
    List references here in alphabetical order with a ½” hanging indent for all subsequent lines. To format, click on the small arrow at the bottom left corner of the Paragraph section in Word.
    References should be listed alphabetically by the first word of the entry. This may be the author’s last name or title of the reference, etc. depending on the reference. The company website can be one of your references.

Sample Solution