Nike Company

Topics: Asset, Investment, Balance sheet Pages: 7 (2165 words) Published: March 15, 2011
Nike was founded in 1964 as Blue Ribbon Sports by University of Oregon track athlete Philip Knight and his coach Bill Bowerman, and officially became Nike, Inc. in 1978. The company takes its name from Nike, the Greek goddess of victory, and adopted the well-known logo, called the “Swoosh”, first used by Nike in 1971. Nike produces a wide range of sports equipments. Their first products were track running shoes, for a wide range of sports including track & field, tennis, baseball, Association football, lacrosse, basketball etc. Nike sells an assortment of products, including shoes and apparel for sports activities for men, women and children. Nike has contracted with more than 700 shops around the world and has offices located in 45 countries outside the United States Most of the factories are located in Asia, including Indonesia, China, Taiwan, India, Vietnam, Philippines, and Malaysia. The company’s goal is to deliver value to five constituencies: shareholders, consumers, business partners, employees and the community. NIKE focuses in four key areas:

• Deepening company’s relationship with consumers;
• Delivering superior, innovative product to the marketplace; • Making supply chain a competitive advantage, through operational discipline and excellence; • Accelerating growth through focused execution.

NIKE believes that they can create value for their shareholders in striving for the following key long-term financial goals: • High single digit revenue growth;
• Mid-teens earnings per share growth;
• Increased return on invested capital and accelerated cash flows; and • Delivery of consistent results through management of our diversified portfolio of businesses Nike Company’s strategic goals are to deliver compelling product, maintain the integrity of their brands while building even stronger relationships with consumers, strengthen and affect their operational capability, and create compelling retail experiences – both in their owned retail and with wholesale partners. They also focused on the highest potential opportunities: seven key markets in Brazil, China, India, Japan, Russia, U.K. and U.S. and seven key performance and lifestyle categories – action sports, basketball, football, men’s training, running, sportswear and women’s training. Nike’s marketing strategy is an important component of the company’s success. Nike is positioned as a premium-brand, selling well-designed and expensive products. Nike lures customers with a marketing strategy centering on a brand image which is attained by distinctive logo and the advertising slogan “Just do it”. Nike's major competitors are Reebok, Adidas, Converse, New Balance, Puma which also designs and develops athletic shoes and apparel. Nike and Reebok compete in the U.S. and internationally. Each company uses their own type of advertising strategy to reach their target customers. Many of the advertisements feature athletic stars and commercials that relate to the customers. By 1980, Nike had reached a 50% market share in the United States athletic shoe market and the company went public in December of that year. Nike is one of the most successful companies in the world. In 1998, Nike posted record sales of $ 9.6 billion, selling nearly 160 million pairs of athletic shoes. Now we want to perform some financial analysis of NIKE. As we know, sometimes companies fail even been popular among consumers and having a good sales growth. First of all we looked at company’s liquidity. We picked Current Ratio, as it is the important measurement of company’s liquidity. The ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. The current ratio is simply computed by dividing current assets by current liabilities. Creditors and agencies look at this ratio to...
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