Nike Financial Ratio Executive Summary
NIKE, INC.: Executive Summary Financial Statement Ratios
According to Nike’s SIC number (3021), the company is classified in the “rubber and plastic footwear” industry. Relying upon this information Mergent Online identified the following American companies as competitors to Nike:
• Columbia Sportswear Company Annual Revenue $ 1,483,524,000
• Deckers Outdoor Corporation Annual Revenue $ 1,000,989,000
• Crocs, Inc. Annual Revenue $ 789,695,000
• Bakers Footwear Group Annual Revenue $ 185,625,844
• LaCrosse Footwear, Inc. Annual Revenue $ 150,542,000
• PC Group, Inc. Annual Revenue $ 44,989,046
With 2010 annual revenue of $19,014,000,000, Nike’s revenue was substantially greater than the identified competitors. Due to the revenue difference and the lack of athletic footwear company in the list, I expanded the analysis to include the German company Adidas. Adidas is listed under SIC 5139 – Footwear. Despite the SIC differences, Adidas and Nike are the most direct competition for the athletic market. In addition, Adidas’ 2010 revenue converted to USD is $ 16,047,083,997.
One common thread between all of these companies is the reliance upon consumers. As the economy has been struggling over the past few years, the amount of disposable income has decreased. Have these companies managed to thrive or struggle during this recession? To analyze Nike’s financial standing compared to their competitors, I have focused on the larger revenue companies and omitted Bakers Footwear Group, LaCrosse Footwear, Inc. And PC Group from the analysis.
A good indicator of the financial health of a company is its ability to meet short term obligations:
Current Ratio Quick Ratio
LIQUIDITY RATIOS 2010 2009 2010 2009
NIKE, Inc 3.26 2.97 2.32 1.93
Adidas AG 1.5 1.58 0.78 0.8
Columbia Sportswear Co. 3.94 5.17 2.4 3.55
Deckers Outdoor Corp. 4.94 5.16 3.88 4.15
Crocs Inc 3.17 3.36 1.52 1.47
The current ratio
According to Nike’s SIC number (3021), the company is classified in the “rubber and plastic footwear” industry. Relying upon this information Mergent Online identified the following American companies as competitors to Nike:
• Columbia Sportswear Company Annual Revenue $ 1,483,524,000
• Deckers Outdoor Corporation Annual Revenue $ 1,000,989,000
• Crocs, Inc. Annual Revenue $ 789,695,000
• Bakers Footwear Group Annual Revenue $ 185,625,844
• LaCrosse Footwear, Inc. Annual Revenue $ 150,542,000
• PC Group, Inc. Annual Revenue $ 44,989,046
With 2010 annual revenue of $19,014,000,000, Nike’s revenue was substantially greater than the identified competitors. Due to the revenue difference and the lack of athletic footwear company in the list, I expanded the analysis to include the German company Adidas. Adidas is listed under SIC 5139 – Footwear. Despite the SIC differences, Adidas and Nike are the most direct competition for the athletic market. In addition, Adidas’ 2010 revenue converted to USD is $ 16,047,083,997.
One common thread between all of these companies is the reliance upon consumers. As the economy has been struggling over the past few years, the amount of disposable income has decreased. Have these companies managed to thrive or struggle during this recession? To analyze Nike’s financial standing compared to their competitors, I have focused on the larger revenue companies and omitted Bakers Footwear Group, LaCrosse Footwear, Inc. And PC Group from the analysis.
A good indicator of the financial health of a company is its ability to meet short term obligations:
Current Ratio Quick Ratio
LIQUIDITY RATIOS 2010 2009 2010 2009
NIKE, Inc 3.26 2.97 2.32 1.93
Adidas AG 1.5 1.58 0.78 0.8
Columbia Sportswear Co. 3.94 5.17 2.4 3.55
Deckers Outdoor Corp. 4.94 5.16 3.88 4.15
Crocs Inc 3.17 3.36 1.52 1.47
The current ratio
References: • Subramanyam, K.R., Wild, J.J., “ Financial Statement Analysis” • Mergent Online 2009-2001 Financial Statements http://www.mergentonline.com.dml.regis.edu/companyfinancials.php?compnumber=90656 • iStockAnalyst, “Five Companies Expected To Hike Dividend This Year” May 18, 2011 http://www.istockanalyst.com/finance/story/5159809/five-companies-expected-to-hike-dividend-this-year