Table of Contents
Total Revenues..page 3
Gross Margin.page 3
Net Incomepage 4
Current Assets…page 4
Current Liabilities.page 4
Working Capital….pages 4 5
Nikes Healthpage 5
Common Stock Outstanding.page 5
Nikes Sales Health..page 5
Nikes Fiscal Yearpage 6
Illustrations and Graphspages 7 12
Works Cited…page 13
Nike is probably the mot well known name in sports athletic apparel. Nike has supported the most prolific names n sports. Michael Jordan, Tiger Woods, and Ken Griffey Jr. are just a few of the athletes that Nike sponsors. The companys revenue constantly grosses in the billions. The company continues to dominate the athletic apparel industry.
Nike was established in 1957 by a coach and an athlete. The two went on to establish the most successful footwear company in the world. Bill Bowerman and Phil Knight are the two founders. From 1961 to 1971, Knight joined with a Japanese company named Tiger. He thought that the company would end Germanys domination over the footwear industry. When he met with the company, they asked what company he represented and Knight came up instantly with the name Blue Ribbon Sports. The company would later become Nike. Blue Ribbons revenue continued to rise and in 1971, a student names Carolyn Davidson designed the Nike Swoosh symbol for $35. In 1972, Blue Ribbon separated from Tiger and became Nike. The company arrived at the name from the Greek Goddess of victory, Nike. The 2700 employee company went public in 1980. From 1981 to 1991, Nike began to sponsor the top athletes in the world of sports. Nike pursued the likes of athletes such as Carl Lewis and Michael Jordan. Nike Company topped the 107 billion-dollar mark in 1986. The company established the Just Do It campaign in 1987. Nike continues to dominate the footwear category not only in the United States, but also in Canada, Japan, and Taiwan.
Financial Statement Analyzation
Nikes financial history has fluctuated constantly in the past five years. In the years 1998 and 2001, Nikes revenues were at its highest ten year point. The price of Nikes common stock has gone down in the past five years. It was at its highest point in 1997 and next highest in 1999.
The Chicago Bulls had won their second National Basketball Association championship in 1997. Michael Jordan was the best basketball player at the time and everyone wanted to be like Mike. Jordan was under a contract with Nike for his Air Jordan sneakers. This was great for Nike, because it allowed the company to capitalize off of Jordans success. Nikes revenue for 1997 was $9,186.5 million. This was an increase of nearly 3 billion dollars from 1996. The Chicago Bulls had completed a three peat in 1998. Michael Jordan was still under a contract with Nike and the company was able to capitalize again with the revenue increasing by $400 million to $9, 553.1 million in 1998. In 1999, the price of Nikes common stock had risen but its total revenues had fallen nearly 1 billion dollars from the previous year to $8, 7769. Nikes revenues had increased to $8, 995.1 in 2000 and to $9, 488.8 in 2001. These numbers are for the fiscal year ended May 31.
The gross margin ratio is defined as gross margin (net sales minus cost of goods sold) divided by net sale. Nikes gross margin ratio was 40.1% in 1997. The highest it had been in a ten year period. The ratio had fallen to 36.5% in 1998. It began to
increase in 1999 to 37.4%. The gross margin ratio was 39.9% in 2000. Nearly as high as it was in 1997. The gross margin ratio had fallen only .9% in 2001 to 39.0%.
1997 was a good year fro Nike. Nearly all of its financial numbers were at their highest ten year point. Nikes net income was $795.8 million in 1997. That was an increase of $242.6 million from 1996. There was a dramatic decrease in net income in 1998. Nikes net income was $399.6 million in 1998. In 1999, the net income increased $60 million to $451.4 million. The net income increased steadily in 2000 and 2001. The number increased from $579.1 million in 200 to $589.7 million in 2001.
Nikes current assets were at their highest ten year mark in 2000 and 2001. The total assets had increased nearly $600 million in 2000. The amount was $5, 856.9 million. The number had fallen somewhat in 2001 to $5, 819.6 million.
Nike was having very good revenue numbers in 2000 and in 2001. The numbers that the company produced were good for stockholders and for the company. The total current liabilities for the company were relatively small. The liability count was $470.3 million in 2000 and had decreased to $435.9 in 2001.
Nikes working capital in 2000 had decreased nearly $400 million from the previous year. The working capital in 2000 was $1, 456.4 million. In 2001, the working
capital had increased nearly $400 million. This number was greater than the amount in 1999. The working capital was $1, 838.6 million in 2001.
Nike is constantly going to be a leader in the athletic apparel department. The company continues to have the most attractive advertising and it also continues to attract the best athletic clientele in all aspects of sports. Nike is still considered to be the top company in the footwear competition. The companys numbers are constantly increasing. The price of the stock may fall, but the liabilities and total income continues to rise. This is a reason that Nike is still considered to be one of the healthiest companies in the athletic business.
Average Common Stock
Nikes outstanding shares of common stock was at 288.4 million in 1997. This was an increase of .8% from 1996. The companys outstanding shares in 1998 were at 288.7 million. The number began to decrease steadily each year after that due to the company being heavily traded on the stock market. The number was 283.3 in 1999. It was at 279.4 in 2000. The number had decreased by 6.1 to 273.3 in 20001.
Nikes 2001 Sales Health
Nikes sales were very appealing in 2001 when compared to 2000; the company increased its numbers a great amount in almost all categories. Its revenues were better than the previous years and there was also a higher return on equity. 2001 was a good year for Nike Company. The numbers were very similar to that of 1997 when Nike could have been said to be at its peak.
Nikes Fiscal Year and Conclusion
Nike Companys fiscal year end at May 31 each year. Looking at Nikes financial numbers shows that the company is not only a top choice in the general publics eye, but also to many investors. Nike is a company that an investor would find very attractive. It is a company that has high revenue numbers each year and is established. When thinking about what to do about a Nike stock, Just Do IT.
1.A Coach and an Athlete.www.Yahoo.com
2.1997 History. www.Nike.com
3.1998 History. www.Nike.com
4.1999 History. www.Nike.com
5.2000 History. www.Nike.com
6.2001 History. www.Nike.com
7. Nikes Eleven Year Financial History. www.Nike.com