Accountant

Accountant

Introduction

In this report the financial analysis of the famous Nike and a brief industry analysis will be done. This report is being prepared to tell that how lucrative this particular organization is with respect to its profitability. After going through the financial values of the Nike the readers will get the idea that what is the financial position of the organization and where does it actually stand.

Financial Analysis

Ratio analysis is done below for illustrating the highlights of the organization's overall profitability and other issues important for an investor (Nissim & Penman, 2001).

Profitability Ratios

2012

2011

2010

ROA % (Net)

14.55

14.5

13.78

ROE % (Net)

21.92

21.77

20.67

ROI % (Operating)

28

27.32

25.42

In the table above profitability ratios of Nike are shown. There is a small but consistent increase in all the three ratios. This shows that the company has made good use of the assets, equities and the investments deployed. All the three are playing role in the generation of more returns.

Liquidity Ratios

2012

2011

2010

Quick Ratio

1.82

1.94

2.32

Current Ratio

2.98

2.85

3.26

In the table above the quick and current ratios are showing the Nike's liquidity. Nike's ability to repay its immediate liabilities is declining consistently according to the quick ratio. Current ratio is although not too bad of the recent year as it has a slight increase. But it is not good enough as out of the two quick ratios is more efficient tool.

Debt Management

2012

2011

2010

Total Debt to Equity

0.04

0.07

0.06

Interest Coverage

995.33

712

400.51

Now the debt management ratios of the organization are showing that in 2012 the level of debt has declined. This is a good situation as investors are showing interest in the organization and the level of obligations is also lowering down. Increase in debt to equity ratio can be due to two reason; debts are decreasing or the equity is increasing both is good for the organization. The other ratio is also showing desirable situation.

Per Share

2012

2011

2010

Cash Flow per Share

2.06

1.91

3.26

Book Value per ...