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Accounting Financial Analysis Nike

   

Added on  2021-05-31

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ACCOUNTINGFINANCIAL ANALYSISNIKE STUDENT ID:[Pick the date]
Accounting Financial Analysis Nike_1

Question 1Revenue for FY2017 was $34,350 million.Question 2The net accounts receivables for Nike for the year ending on May 31, 2017 was $ 3,677million.The gross accounts receivables for Nike for the year ending on May 31, 2017 was $3,696millionQuestion 3The write off during the FY2017 for bad debts was $ 17 million while the actual bed debtexpense at $ 13 million was smaller than that written off.Question 4The inventory as on May 31, 2017 was $ 5,055 million.Question 5Gross profit (FY2017) = $15,312 millionRevenue (FY2017) = $34,350 millionGross profit margin = (15312/34350)*100 = 44.58%The gross profit margin implies that 44.58% of the sales amount would be gross profit.Question 6
Accounting Financial Analysis Nike_2

In the given case, conversion would first need to be done into FIFO considering that Nikeuses the FIFO method to measure costs.COGS under FIFO = COGS under LIFO + Change in LIFO Reserve = 2259 + (518-422)= $2,355 millionRevenue = $3,963 millionGross profit = 3963-2355 = $1,608 millionGross profit (%) = (1608/3963)*100 = 40.58%Clearly Nike’s gross margin is higher than the competitor.Question 7Total gross PPE as on May 31, 2017 = $7.958 millionNet PPE as on May 31, 2017 = $3.989 millionThe difference between the two is attributed to accumulated depreciation.Question 8The balance sheet equation for the issue of bonds is indicated belowAssets (+$50 million) = Liabilities (+50 million) + Equity (No change)There would be an increase in cash by $ 50 million owing to bonds which issued which leadto non-current liability for bonds payable to the same amount.The balance sheet equation for the purchase of PPE is indicated belowAssets (No change) = Liabilities (No change) + Equity (No change)The cash in the current asset is now used to buy PPE and hence indicated as fixed assets.Question 9
Accounting Financial Analysis Nike_3

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