Gross Profit Margin Gross profit margin is useful to assess Debenhams’ financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold; therefore‚ it is considered to be one of best economic tools for measuring and analyzing the data of Debenhams PLC. Comparing the GPM in 2014 with in 2013‚ it decreased 1.05% from 13.13% (2013) to 12.08% (2014). Although the total revenue increased £30.5 million‚ gross profit decreased £20.3 million. There
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ignored.) C8: Using CAPM: KE’=3.2%+0.91*5.5%=8.21% C9: Using DGM formula: P’=D1/ (KE’-g) =1.06*(1+8%)/(8.21%-8%)=$545 In Nike’s case‚ when Joanna Cohen calculated the WACC of Nike‚ she made several mistakes and led to a wrong estimate of the cost of capital. The first mistake comes to the book value of equity used in calculating WD. Nike became a publicly traded company since December 2‚ 1980‚ the share price has changed significantly during 20-year’s time. So‚ the market value of equity should be used
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Frazier’s essay‚ “In Praise of Margins”‚ the author talks about his childhood life and how he had “margins” where he and his friends would do things and nothing would matter because they wouldn’t care. “Marginal” thought is valuable because it allows adults to use their imagination. His purpose is to try new activities without shame; it’s the spur of the moment that defines margin. I think his view about marginal activity is comprehensive and relatable. When we think of margins‚ we think of the extra space
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Corporate Finance Nike‚ INC: Cost of capital 1. What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? Definition of WACC (Weighted Average Cost of Capital): WACC is basically the average of the cost of finance (debt and equity). Since a company’s assets can be financed by debt or equity‚ WACC can show the averages of the costs involved in the sources of financing. These costs are then weighted
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firm’s bond‚ Johanna only used the interest expense of the year divided by the average debt balance‚ which fully ignored the discounted cash flow of the cost of debt. 2. If you do not agree with Cohen’s analysis‚ calculate your own WACC for Nike and be prepared to justify your assumptions. Combining the analysis above‚ we now give our own WACC calculation as following: 2.1 The value of debt(based on EXIHIBIT 3). Since the book value of debt may represent the market value‚ we merely
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BUSINESS ADMINISTRATION CASE STUDY – NIKE CSR (page 70) 1. In referring to the opening profile and the closing for this chapter‚ discuss the challenges regarding corporate social responsibility that companies in the apparel industry face in its supply chains around the world? Answer: There are 5 challenges related to CSR: a. Lack of awareness and benefit of CSR In fact‚ many of companies have little knowledge about CSR. In some cases‚ companies may have a greater understanding of CSR
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Howard V. Perlmutter (1985)‚ "Strategic Planning for a Global Business‚" Columbia Journal of World Business‚ 20 (2)‚ 3-10. DeTienne‚ Kristen and Lee Lewis (2005)‚ "The Pragmatic and Ethical Barriers to Corporate Social Responsibility Disclosure: The Nike Case‚" Journal of Business Ethics‚ 60 (4)‚ 359-376. Devlin‚ Godfrey and Mark Bleackley (1988)‚ "Strategic Alliances--Guidelines for Success‚" Long Range Planning‚ 21 (5)‚ 18-23. Dussauge‚ Pierre and Bernard Garrette (1999)‚ Cooperative Strategy: Competing
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Nike is a major publicly traded sportswear‚ footwear and equipment supplier based in the US which was founded in 1962 originally know as Blue Ribbon Sports. Nike is the world leader in the manufacturing of sportswear and gear with more than 47 market shares across the global (Nike.com‚ 2011). Nike produces a wide range of sports equipments such as running shoes‚ sportswear‚ football‚ basketball‚ tennis‚ golf‚ etc. Now Nike follows the global fashion trends and is well known and popular in the
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Marketing Excellence / Nike Question 1: What are the pros‚ cons and risks associated with Nike’s core marketing strategy ? We can evaluate Nike’s core marketing strategy as related them to the relevant marketing theories. First of them is distribution theory. Nike distributes its products on different level basis. The high quality products are given to a certain distributers while the low price to be sold at highly discounted price at the retail stores such as Wal-Mart. Nike has also become the leader
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Nike Ethics Nike Incorporated is the number one leading sportswear and equipment provider in the world. They manufacture anything from casual clothes to sports equipment‚ shoes to socks‚ and basketballs to golf balls. As a result of its massive success‚ Nike employs nearly 30‚000 people worldwide while manufacturing in 700 shops around the globe and has 45 offices outside the United States. Its extensive reach into the global market has Nike producing more exclusive products than any other
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