Financial Analysis: Nike Vs. Adidas

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Alex. U/GSU EMBA Financial Reporting
Comparative Financial Analysis Nike Inc. vs. Adidas AG
Submitted to: Dr. Ismail Gomaa
By: Ghada Mahmoud Saafan 1/1/2010

CONTENTS

Contents ........................................................................................................................................................................2 Methodology: ................................................................................................................................................................3 Nike Inc. .........................................................................................................................................................................3 Income Statement-Common Sized: ...........................................................................................................................3 Balance Sheet – Common-Sized: ...............................................................................................................................4 Cash Flow – Common Sized .......................................................................................................................................6 Profitability Analysis ..................................................................................................................................................8 Liquidity Analysis .......................................................................................................................................................9 Solvency Analysis .....................................................................................................................................................10 Market Test Analysis:...............................................................................................................................................10 Nike and Adidas Comparison .......................................................................................................................................11 Adidas: .....................................................................................................................................................................11 Common Sized Comparison of Nike and Adidas:.....................................................................................................11 Comparison Pros and Cons ......................................................................................................................................13 Ratio Comparison ....................................................................................................................................................13

METHODOLOGY:
Studying the financial situation by Nike Inc. company was made by horizontal and vertical analysis of the company financial items and ratios This financial analysis paper is based on a case study of the company Nike Inc. and its comparison with its competitor Adidas AG. It aims to evaluate the individual and comparative performance of Nike Inc. based on the financial statements included in the case. In order to understand the financial position and performance of the company a common-size analysis was first made of all the company financial statements. Methodology of ratio analysis is conducting horizontal, vertical, and comparative analysis of the company facts through financial ratios commonly used in these cases; considering the company management practices to handle the famous financial crisis in late 2008 and 2009; evaluating viability of each of the two companies; comparing the two companies’ performance; indentifying problems (if any); then formulating conclusions.

NIKE INC.

The company was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight, and officially became Nike, Inc. in 1978. Nike markets its products under its own brand as well as Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding and subsidiaries including...
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