Financial Report: Nike and its competitors
Nike is a $280 billion industry that is highly competitive in the mature market. Some of their main competitors are companies such as Adidas and Puma, which we will analyze in this report to compare and contrast their financial position in the market. As of now, the following graph shows the market share for Nike and our competitors:
They are in the industry of apparel and textile with sub industries. They have their own world wide retail stores as well major worldwide marketing campaigns. Nike consist of four extremely important worldwide brands which are; Cole Haan acquired in 1988, Huley International in 2002, Converse 2003 and last but certainly not least, Umbro which was bought in 2008. Nike consists of 34,400 employees world wide and four main product lines; athletic shoes, apparel, sports equipment and accessories In terms of equity for the company, it accounts for $9.75 billion with a market capitalization of approximately $37 billion. When looking at their accounting methods, they have a different tax year and fiscal year, starting in January 1st till December 31st for tax purposes, while in terms of their fiscal year it starts June 1st and ends may 31st. They have a 110-day operating cycle, with an average of 79 days to sell inventory and an average of 31 days to collect its account receivables following the accounting method of US GAAP. As for its receivables policy, they get their money in no longer than 12 months. Following on their accounting methods, they have contractual obligations such as long term debt and operating leases as well as accrued liabilities such as dividends payable and advertising and marketing. Some of the accounting practices that they follow are for example revenue Recognition which are recorded at the time of sale. Provisions for sales discounts, returns and miscellaneous claims from customers are made at the time of sale. Also adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive income in shareholders’ equity. They also follow the stock option by issuing shares to its shareholders as well as stock-based compensation which employees can purchase rights under the Employee Stock Purchase Plans (“ESPPs”) using the Black−Scholes option pricing model. (Face Value or the original value that Nike establish. Rencently they have adopted a different accounting standards. Carried out in February 2010, the FASB issued amended guidance on subsequent events. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and the Company adopted these new requirements since the third quarter of fiscal 2010. And finally, Nike measures for impairment annual on the goodwill and intangible assets.
The following graphs represents the percentage of revenue for Nike fo the different sub industries. As seen, the biggest percentage accounts to their innovative footwear. This trend, as seen in the first table, is the same for all the previous years. The second table shows how the income of Nike is being
|Business Segment |2010 |% of Revenue |2009 |% of Revenue | |North America: |$6,696 |$6,778 |-1% |$6,660.5 | |Western Europe: |$3,892 |4,139 |-6% |4,320.0 | |Central and Eastern Europe:...