FIN-350 Financial Analysis Outline

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Grand Canyon University *

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Jan 9, 2024

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Financial Analysis Project Financial Analysis Project Andrew Schneekloth Grand Canyon University: FIN-350 Prof. Rodriguez October 15, 2023 1
Financial Analysis Project Financial Analysis Project The purpose of this paper is to analyze an annual Securities and Exchange Commission (SEC) report for Nike, Inc and evaluate their strengths, efficiency, and effectiveness. Nike, Inc is a multinational corporation which is known worldwide for their shoes, apparel, and sports equipment. Their mission, “is to bring inspiration and innovation to every athlete in the world, which includes the belief that if you have a body, you are an athlete. We aim to do this by creating groundbreaking sport innovations, making our products more sustainably, building a creative and diverse global team and making a positive impact in communities where we live and work” (10-k Forum). Nike, like any other company, faces challenges and has to figure out different types of strategies to keep the company growing in an upward trajectory. A challenge that Nike faces would be the competition and dealing with marketing the company on social media where negative publicity can be amplified. One of Nike’s main strategies is to “keep achieving long-term revenue growth by creating innovative must have products” (10-k forum). Nike has been doing this by increasing their speed and swiftness to advertise and build connections with their customers. In 2020, they announced a new digital phase of the consumer direct offense strategy called consumer direct acceleration. This new strategy should align with more product creation, focus more on the wants and needs of the consumer, and will use more in-depth analytic practices to gather more information in order to move forward in the digital transition of the company. Nike believes this approach will accelerate growth and make the company more efficient as a whole. Overall, Nike has proven year and year again why they are one of the top companies in the world using different strategies to increase connections with consumers as well as growth of their overall business. 2
Financial Analysis Project Stock Price Trends Include a visual representation of the stock price trends. Discuss recent trends in the company’s stock price . (2) The graph below shows the trajectory of Nike, Inc in a 5-year span of time starting in 2016 at an investment of $100 and ending in 2021 with the total investment at $260 a increase of $160 over the 5 years. In 2019, was when the investment started increasing at a fast rate while at the same time S&P 500 APPAREL started to decrease. Nike is a part of DOW JONES US FOOTWEAR INDEX because Nike is a part of DOW JONES the price and return of their stock has a substantial effect on the index. Evaluation of Efficiency and Effectiveness (3) Provide an introduction for this section. Liquidity Liquidity is the ability of a firm, “to meet short-term obligations as they come due” (Melicher, R.W., et al. 2019). One measure of liquidity is the current ratio. The current ratio is calculated by dividing the firm’s current assets by their current liabilities. Include a sentence for 3
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Financial Analysis Project what is considered a good range for the ratio . Then include what your benchmark company’s current ratio is and even better if you compare it to its closest competitor. For example, … As of September 2021, Twitter has a current ratio of 4.09 and one of their biggest competitors, Facebook, has a current ratio of 4.23 ( Twitter financial statements , n.d.). Complete the paragraph by evaluating the company’s ratio in comparison to the competitor and the standard considered acceptable. Asset Management Asset management … Financial Leverage (Debt Management) Financial leverage … Evaluation of Financial Strength (4) Provide an introduction for this section. Profitability Profitability… Market Value Market value … Conclusion Based on your findings, provide an evaluation of the overall organization. Is this a company you would invest in or recommend to others, why or why not? What were the key metrics as to why you made decision? 4
Financial Analysis Project References Remember for every reference (minimum of 3) you should have an in-text citation. Below are a couple of examples for format. Conkright, T. A. (2015). Using the four functions of management for sustainable employee engagement. Performance Improvement , (8), 15. Curran, T. M., & Prottas, D. J. (2017). Role stressors, engagement, and work behaviors: A study of higher education professional staff. Journal of Higher Education Policy & Management , 39(6), 642-657. nke-20210531 (sec.gov) 5
Financial Analysis Project Appendix Industry Company A Company B $ in millions As of date ___ As of date____ Cash / Marketable Securities AR Inventory Current Assets Fixed Assets Total Assets AP Current Liabilities Total Liabilities Total Stockholder’s Equity Total Net Sales / Revenue COGS EBIT Interest Expense Earnings / Net Profit / After Tax Profit Stock Price 6
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Financial Analysis Project Ratios Company A Company B Ratio Category Ratio Name Ratio Formula 12/31/21 ratio 12/31/21 ratio 1. Liquidity 2.Asset Mgmt. 3. Leverage 4. Profitability 5. Market 7