The financial statements for Nike, Inc., are available at the Appendix B link ab

Question

The financial statements for Nike, Inc., are available at the Appendix B link above. The following additional information (in millions) is available:

Accounts receivable at May 31, 2010: $3,138
Inventories at May 31, 2010: 2,715
Total assets at May 31, 2010: 14,998
Stockholders' equity at May 31, 2010: 9,843

Determine the following measures for the fiscal years ended May 31, 2013 (fiscal 2012), and May 31, 2012 (fiscal 2011). Do not round interim calculations. Round the working capital amount in part (a) to the nearest dollar. Round all other final answers to one decimal place. When required, use the rounded final answers in subsequent computations.

Fiscal Year
  2012 Fiscal Year
  2011 a. Working capital (in millions) $ $ b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days' sales in receivables days days f. Inventory turnover g. Number of days' sales in inventory days days h. Ratio of liabilities to stockholders' equity i. Ratio of sales to assets j. Rate earned on total assets, assuming interest expense is $23 million for the year ending May 31, 2013, and $31 million for the year ending May 31, 2012 % % k. Rate earned on common stockholders' equity % % l. Price-earnings ratio, assuming that the market price was $61.66 per share on May 31, 2013, and $53.10 per share on May 31, 2012 m. Percentage relationship of net income to sales % %

Explanation / Answer

Fiscal Year Fiscal Year Formulae   2012   2011 a. Working capital (in millions) $ 9700 $ 7963 Current Asset-Current Liabilities b. Current ratio 3.4707081 3.05126224 Current Assets/Current Liabilities c. Quick ratio 2.31329598 1.77460072 Current Assets-Inventory-Prepaid Expenses/Current Liabilities d. Accounts receivable turnover 8.10145623 7.44210526 Net Credit Sales/Average Accounts Receivables e. Number of days' sales in receivables 45.0617284 49.0591398 365 days/Accounts Receivable Turnover f. Inventory turnover 4.2905649 4.44096345 Cost of Goods Sold/Average Inventory g. Number of days' sales in inventory 85.0703831 82.1893727 365 days/Inventory Turnover h. Ratio of liabilities to stockholders' equity 0.57619218 0.48974087 Liabilities/Stockholders Equity i. Ratio of sales to assets 1.43954732 1.5086324 Net Sales/Total Assets j. Rate earned on total assets, assuming interest expense is $23 million for the year ending May 31, 2013, and $31 million for the year ending May 31, 2012 18.3746588 19.7348852 Income-Assumed Interest/Total Assets*100 k. Rate earned on common stockholders' equity 28.9619935 29.3998651 Income-Assumed Interest/Shareholders Funds*100 l. Price-earnings ratio, assuming that the market price was $61.66 per share on May 31, 2013, and $53.10 per share on May 31, 2012 22.9219331 21.9421488 Market Price/Earning Per Ratio m. Percentage relationship of net income to sales 9.81709003 9.52809567 View comments (4)

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