Ratio Analysis Report

Topics: Financial ratios, Balance sheet, Financial ratio Pages: 17 (5124 words) Published: November 7, 2011





* Executive Summary | * Nike INC|
* Puma|
* Adidas|
* Financial Ratios|
* DOL & DFL|
* Analysis of Financial Ratios|
* Conclusion|


This report highlights the comprehensive financial analysis of the three well known sports brands across the world. These companies have their fair share in the dominance of selling sports goods like shoes, Tracks, t-shirts etc and this report will offer an insight of the Sports goods industry to the person who reads.

The ratio examination of the companies and the industry averages enables the reader to make key comparisons and to determine the debt utilization, asset utilization, profitability as well as the liquidity of the company.

Additionally the four year horizontal and trend analysis provides financial insights of the company and helps to know the future aspects of the 3 sports goods companies. Degree of Operating and Financial leverage has also been calculated which helps to know the change in earnings before income and taxes of the company and proportion of debt in the capital structure of the company.

The project also includes certain analysis between the 3 companies which throws light on the areas which require improvement in each of the companies and which will further help to improve the efficiency of the companies. On the basis of calculation and analysis, the reader will be able to conclude as to where the improvement is required by the firm in order to raise its profitability. And which of three companies is having an upper hand among each other.

NIKE Inc. Nike is one of the leading sports goods company over wide in world. It’s a US based company established in 1964. Nike originally known as “ Blue Ribbon Sports “ was founded by Philip knight- a track athlete from a University of Oregon and his coach Bill Bowerman. Initially Nike was one of the distributor of Japanese shoe maker company Onitsuka Tiger. The company showed a remarkable profit in its market and they quickly launched their first BRS retail store in 1966 located on Pico Boulevard in Santa Monica, California. The relation between BRS and Onitsuka was on ending terms and this made BRS to launch their own line of footwear in 1971. Carolyn Davidson designed ‘Swoosh’ which was their first newly brand entered in the market and it was registered with the ‘U.S. Patent and Trademark Office on January 22, 1974. Nike the name came into existence when they sold their design to a soccer shoe named ‘Nike’ which was released in 1971. Design, development and worldwide marketing of the apparels, footwear and other accessories is the principle business activity of Nike. Nike sells their products to their owned retail stores with mix of distributors who have the license. Nike overall has 170 retail stores spread across the world. Virtually all the footwear and apparel products are manufactured outside United States, whereas other equipment are produced both in US and abroad. Even though Nike have had various bad phases regarding the working condition and human rights dilemma in china and India, Inspite of that its considered one of the leading sports brand across the world. It’s a company that began with a humble origin from selling footwear in...

References: * (Adidas Balance sheet)http://www.adidas-group.com/en/investorrelations/reports/annualreports.aspx

* (Nike Balance sheet) http://invest.nike.com/phoenix.zhtml?c=100529&p=irol-finReportin
* (Puma Balance sheet)http://about.puma.com/wp-content/themes/aboutPUMA_theme/financial-report/pdf/150677656.pdf
* (Puma Balance sheet )http://about.puma.com/?cat=19
* Block S.B. and Hirt G.A., 2007, Foundations of Financial Management (thirteenth edition) Mc Graw Hill/Irwin.
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