Financial Forecasting Report: Nike Company's Performance Analysis

This report presents a financial analysis and forecasting for the Nike Company, an American multinational corporation engaged in designing, manufacturing, and delivering sportswear and accessories. The analysis is based on the 2019 financial statements, with reformulated income statements and balance sheets. The financial projections, including sales growth rate, expenses, funding, payout ratio, and profit margin, help determine the company's future operating and investment prospects. Ratio analysis is used to assess profitability, activity, efficiency, leverage, and liquidity. The company demonstrates strong financial stability, with comparisons to industry averages. The report includes references to SEC filings and financial analysis resources, providing a comprehensive overview of Nike's financial health and future outlook, along with recommendations for investment decisions.

Running head: FINANCIAL FORECASTING
Financial Forecasting
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1FINANCIAL FORECASTING
Table of Contents
Financial Analysis...........................................................................................................................2
References........................................................................................................................................4

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Financial Analysis
The financial analysis has been well carried out for the Nike Company, which is an
American Multinational Company that is well engaged into designing, manufacturing and
delivering sports wear and accessories. The analysis has been done for the company based on the
current year financial statements for the year 2019. The income statement and the balance sheet
of the company has been well reformulated with the help of the presented financial statements of
the company. The financial projections of the company has also been done based on the current
financial conditions into which important aspects of the company such as sales growth rate,
expenses, funding and other key factors like payout ratio and profit margin of the company were
well analysed. The financial projections could well help us determine the future operating as well
as prospects of the company so that investment decision could be taken accordingly.
Ratio Analysis as a quantitative assessment tool has been well assessed for the purpose of
analysis of the company financial, management efficiency, profitability and leverage aspects of
the company (Document, 2020).
Profitability: The profit margin reported by the company was around 10.13%, and on the same
hand side the industry ratio has been around 10.02%, so company has performed better in this
aspect. The return on equity for the company has also been in line with the industry aspects,
reflecting that management might be taking important steps and actions for well ensuring a fair
return for their shareholders (Financial Analysis and Stock Valuation, 2020).
Activity Ratio: The day’s sales outstanding for the company has been around 39.86 days and
other companies operating in the same industry took around 35 days.

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Efficiency Ratio: The efficiency ratio for the company has been well calculated with the help of
the inventory turnover ratio which has been around 6.96 times and the industry had the same at
3.92 times. On the other hand side, the fixed asset turnover ratio for the company has been
around 5.44 times, while the industry had a ratio of 1.53 times this goes to well show that the
management of the company have well effectively managed the assets of the company for
generating the maximum amount of sales.
Leverage Ratio: The leverage aspect of the company has been well assessed with the help of
debt to asset ratio for the company showing the amount of debt that the company has borrowed
in response to total assets which has been around 61.88% and the industry had around 65%, this
shows the company on a comparative basis had taken less financial risk (CSIMarket, 2020).
Liquidity Ratio: The liquidity aspect has been well measured with current ratio which has been
very high for the company as compared to its industry average.
On an overall basis the financials of the company has been financially strong and stable.

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References
Document. (2020). Retrieved 17 April 2020, from
https://www.sec.gov/Archives/edgar/data/320187/000032018719000051/nke-
531201910k.htm
Nike (NKE) Financial Ratios - Investing.com. (2020). Retrieved 17 April 2020, from
https://in.investing.com/equities/nike-ratios
Nike Inc (NKE) Return on Investment ROI quarterly and annually, average high and low, overall
ranking from Feb 29 2020 to Feb 28 2019 - CSIMarket. (2020). Retrieved 17 April 2020,
from https://csimarket.com/stocks/NKE-Return-on-Investment-ROI.html
Nike Inc. (NYSE:NKE) | Financial Analysis and Stock Valuation. (2020). Retrieved 17 April
2020, from https://www.stock-analysis-on.net/NYSE/Company/Nike-Inc