- Prepare a comparative balance sheet, income statement, and statement of cash flows, and perform a horizontal analysis of the company’s balance sheet, income statement, and statement of cash flows for the most recent 2 years. Identify at least
one significant change (increase or decrease) from one year to the next in a balance sheet account, income statement account, and statement of cash flows account.
- Identify the causes of the change in each of these accounts.
- Discuss the implications of each of these account changes, and your assessment of the company based on these changes. Do these changes reflect positively or
negatively on the company, and what is your assessment of the outlook for the company?
The company I choose to analyze is Nike Inc. With Nike continuing to grow each year while expanding into more countries globally, the net income increases from 2018-2019 jumps off the page. The company had a 108.4% increase in net income in one year, that is outstanding. Considering the company decreased their stockholder’s equity decreased by 8%, that is signs of a strong organization. With the total liabilities increasing it’s a great sign that the company was able to increase their total assets to offset that rise. Based off these numbers alone as an investor looking to make money long term, I would suggest investing into Nike Inc. with confidence of a high return on investment. Nike is trending in the right direction year in and year out, however I still think there is plenty of room for potential with their global market growing annually. In an ever-growing industry, Nike remains to be in the running among the top apparel and shoe companies world wide. Cost of goods sold went up by 6.6% but with the net sales countering that total with a 7.5% increase Nike was able to increase their brand in a nice way from 2018 to 2019.
| Comparative Balance Sheet | |||
| Cash | 2019 4,466B | 2018 4,249B | % Change 5.1% increase |
| Receivable. Inventory 5,622B 5,261B Total Current Assets 16,525B 15,134B Total Assets 23,717B 22,536B Accounts Payable 2,612B 2,279B Accrued inventory 229M 150M |
Accounts
4,272B 3,498B 22% increase
7% increase
9.2% increase
5.2% increase
14.6% increase
53% increase
liabilities
Long-term Debt 3,464B 3,468B -0.12% decrease
Total Current Liabilities
7,866B 6,040B 30% increase
Total Stockholder Equity
9,040B 9,812B – 8.5% Decrease
| Comparative Income Statement 2019 2018 Net Sales 39,117 36,397 Cost of Goods Sold 21,696 20,351 Gross Profit 4,397 3,962 Operating Income 4,772 4,445 Net Income 4,029 1,933 Comparative Cash Flows |
7.5% increase
6.6% increase
11% increase
7.4% increase
108.4% increase
| Statement 2,019 2,018 5,903 4,955 19.1% increase |
Net cash operating activities
net cash investing activities
Net cash financing activities
Net Cash, end of period
se
| 264 276 -4.35% decrea 5,293 4,835 9.4% increase |
4,466 4,249 5.1% increase
Nike. (2019). Annual Report and Notice of Annual Meeting.
https://s1.q4cdn.com/806093406/files/doc_financials/2019/ar/354352(1)_76_Nike- Inc_COMBO_WR_R1.pdf
Porter, G., & Norton, C. (2018). Using financial accounting information: The alternative to debits and credits (10th ed.). Retrieved from https://www.cengage.com
