NIKE

ANNUAL REPORT PROJECT 2011

Yesenia Rivera ACG2021-SEC001

SUMMARY

This company strives for excellence. Nike is an enormous corporation that continues to do well, even in this questionable economy. They are relentless about innovating to reach their full potential. Despite a few highs and lows within the company they continue to produce high quality sport-inspired equipment. Nike 2011 Annual Report

INTRODUCTION

CEO: Mark Parker Home office :

One Bowerman Drive, Bearerton OR 97005

Fiscal Year ended May 31,2011

Nike specializes in a wide range of products. They are leaders in the production of athletic footwear as well as leisure and casual footwear. Nike also produces sport apparel, accessories and sport performance equipment for not only the SEC teams and the general public here in the US, but globally as well.

AUDIT REPORT

PriceWaterhouseCoopers LLP
1300 SW Fifth Avenue, Suite 3100 Portland, Oregon 97201

Nike will continue to perform and produce high quality sport-inspired equipment despite the fluctuating economy. While suffering in some areas they continue to do well in most.

STOCK MARKET

Most recent price of the companys stock

$85.73

Twelve month trading range of the companys stock

$64.43-$94.23

Dividend per share $.31 Information accessed on 10/4/11 My opinion about the company stock as an investment? HOLD.

INDUSTRY&COMPANY PLANS
Nike is a worldwide leader in the design, marketing and distribution of athletic and sports-inspired footwear, apparel, equipment and accessories. Wholly-owned NIKE subsidiaries include Cole Haan, Converse Inc., Hurley International LLC, Umbro International Limited. NIKE is the largest seller of athletic footwear and athletic apparel in the world. Nike is committed to amplifying their innovation agenda and driving growth at the category, brand and country level. Nike acknowledges the fluctuating state of the economy and while they are not immune to those factors, they believe external forces do not control the company's destiny. Nike sees huge opportunity to drive growth by executing on their strategy to transform the marketplace , also they see tremendous opportunity in evolving their operational capabilities and continue to refine operations. Forbes Names NIKE most valuable brand in sports NIKE Sustainability and Profit

INCOME STATEMENT
FORMAT: Multi-step Nike has progressed significantly in all areas! 2011 Gross Profit Income from Operations Net income $2,693,000 8,520,000 6,450,000 2010 $2,434,000 7,550,000 5,590,000

BALANCE SHEET
Assets = Liabilities + Stockholders Equity
The chart demonstrates a significant change in the assets account. It increased by $752,000 over the year.

2011 Assets Liabilities Stockholders Equity $14,803,000 4,904,000 9,899,000

2010 $14,051,000 4,391,000 9,660,000

CASH FLOWS
Cash provided by operations decreased from 3.8 billion in 2010 to 1.8 billion in 2011. The primary source of operating cash flow was net income at 2.1 billion. Cash used by investment activities dropped to 1 billion in comparison to 1.3 billion in the year 2010. This decrease was caused by less purchases of short term investments. Cash used by financial activities rose to 2 billion in 2011 in comparison to 1.1 billion in 2010, this was likely caused by an increase in share repurchases and dividends paid, Also was offset by an increase in notes payable. Cash flow from operations was less than net income this year, however was significantly higher than net income last year in 2010.

ACCOUNTING POLICIES
Top accounting policies

Other Financial Topics Discussed

Revenue recognition

Recording wholesale revenues when title passes and the risks and rewards of ownership have passed to the customer, based on the terms of sale Property, plant and equipment, including buildings, equipment, and computer hardware and software are recorded at cost and are depreciated over the estimated useful life. Ongoing estimates relating to the net realizable value of inventories, based upon our assumptions about future demand and market conditions. Cash and equivalents represent cash and shortterm, highly liquid investments with maturities of three months or less at date of purchase.

Allowance for uncollectable accounts receivable Hedge accounting derivatives

Property and Plant Equipment

Stock based compensation

Taxes Shipping/handling costs Foreign currency translation and foreign currency transactions Demand Creation Expense

Inventory

Cash and equivalents

FINANCIAL ANALYSIS/LIQUIDITY RATIOS

2011 Nike has worked on improving their working capital efficiency this year by $110,000,000 Working Capital Current Ratio Receivable Turnover Days Sales Uncollected Inventory Turnover Days Inventory On Hand $7,279,000,000 2.93 2.00 182.5 4.8 278.4

2010 $7,389,000,000 3.35 1.70 214.7 4.6 354.36

FINANCIAL ANALYSIS/PROFITABILITY RATIOS

Profit margin fell in 2011 due to higher input cost as well as higher transportation costs and a lower mix of licensee revenue.

2011 Profit Margin Asset Turnover Return on Assets Return on Equity 14.5% 6.59% 45.6% .42

2010 46.3% .35 13.8% 5.70%

FINANCIAL ANALYSIS/SOLVENCY RATIO

Evaluates the proportion of Nikes company Assets financed by creditors and the proportion financed by stockholders

2011

2010

Debt to Equity

.49

.45

FINANCIAL ANALYSIS/MARKET STRENGTH RATIOS

2011 Earnings Per Share Dividend Yield $1.39 1.6%

2010 $1.17 1.9%