financial statement analysis

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Introduction

ACC305
Cost Accounting
Fall 2019
AWR Step 1: Financial Statement Analysis Project
This is not a group project. You are not allowed to share your project with other students or publicize your work in any public websites which other students can access with or without paying fees). Students involved in sharing projects will be prosecuted according to the Student Academic Honesty Policy and receive failure grades.
Purpose
This project is aimed at familiarizing students with the basic skills and information needed for financial statement analysis. Also, students will learn how to use online databases for financial statement analysis.

Step 1

Use the following link to access the website of MergentOnline available in the library’s databases.
http://webdb.plattsburgh.edu:2048/login?url=http://www.mergentonline.com/compsearch.asp
Select a firm you want to investigate (Firm A). Also, select a major competitor of this firm (Firm B). You may find the competitor’s information using the competitors tab.
List the two firms you selected:
Firm A: __________________________ NIKE
Firm B: __________________________ ADIDAS
Read the Business Summary of Firm A. Copy and paste Business Summary here!
NIKE is engaged in the design, development and marketing and selling of athletic footwear, apparel, equipment, accessories and services. Co. focuses its NIKE Brand product offerings in Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Training and Sportswear categories. Co. markets products designed for kids, as well as for other athletic and recreational uses such as American football, baseball, cricket, golf, lacrosse, tennis, walking, and other outdoor activities. Co. has license agreements that permit unaffiliated parties to manufacture and sell, using Co.-owned trademarks, certain apparel, digital devices and applications and other equipment designed for sports activities.
In the Ownership tab, find the percentages of shares owned by the institutional investors for Firm A and Firm B.
Company A Company B
% of shares owned by the institutional investors 62.50% % of shares owned by the institutional investors N/A
Why is it important for investors to pay attention to institutional holdings?
Institutional holdings reefer to the ownerhsip stake in a firm that is held by large financial organizations, endowments or pension funds.Institutional holdings create or destroy shareholders value depending to the extent of control or influence.
In the Ownership tab, find the percentages of shares owned by the insiders for Firm A and Firm B.
Company A Company B
% of shares owned by the insiders 1.45 % of shares owned by the insiders N/A
Why is it important for investors to pay attention to insiders' holdings?
Need to address this question.
http://webdb.plattsburgh.edu:2048/login?url=http://www.mergentonline.com/compsearch.asp

Step 2

In the Company Financials tab, download the most recent three years’ income statements of both firms in Excel format.
Paste your downloaded income statements from Mergentonline here.
2 ADIDAS INCOME STATEMENT
1 NIKE INCOME STATEMENT
Powered by Clearbit
Powered by Clearbit Adidas AG (NBB: ADDY Y)
NIKE Inc (NYS: NKE)
Due to changes with International Financial Reporting Standards (IFRS), recent financials statement presentations have been adjusted to meet this standard. Please note the original historical presentations have remained in the original format
Exchange rate used is that of the Year End reported date
Exchange rate used is that of the Year End reported date
As Reported Annual Income Statement
Report Date 5/31/19 5/31/18 5/31/17 As Reported Annual Income Statement
Currency USD USD USD Report Date 12/31/18 12/31/17 12/31/16
Audit Status Not Qualified Not Qualified Not Qualified Currency EUR EUR EUR
Consolidated Yes Yes Yes Audit Status Not Qualified Not Qualified Not Qualified
Scale Thousands Thousands Thousands Consolidated Yes Yes Yes
Revenues 39117000 36397000 34350000 Scale Millions Millions Millions
Cost of sales 21643000 20441000 19038000 Net sales 21915 21218 19291
Gross profit 17474000 15956000 15312000 Cost of sales -10552 -10514 -9912
Demand creation expense 3753000 3577000 3341000 Gross profit 11363 10703 9379
Operating overhead expense 8949000 7934000 7222000 Royalty & commission income 129 115 109
Total selling & administrative expense 12702000 11511000 10563000 Income from release of accrued liabilities & other provisions 6 - 55
Interest income (expense), net -49000 -54000 -59000 Income from accounts receivable previously written off - - 3
Other expense (income), net -78000 66000 -196000 Gains from disposal of fixed assets 10 - 4
Income (loss) before income taxes - United States 593000 744000 1240000 Reversals of impairment losses for intangible & tangible assets - - 2
Income (loss) before income taxes - foreign 4208000 3581000 3646000 Income from the early termination of promotion & advertising contracts - - 69
Income (loss) before income taxes 4801000 4325000 4886000 Income from the divestiture of the Mitchell & Ness business - - 39
Current provision (benefit) for income taxes - federal 74000 1167000 398000 Sundry income 32 - 94
Current provision (benefit) for income taxes - state 56000 45000 82000 Other operating income 48 133 266
Current provision (benefit) for income taxes - foreign 608000 533000 439000 Expenditure for marketing investments - - -1981
Total current provision (benefit) for income taxes 738000 1745000 919000 Expenditure for point-of-sale investments - - -540
Deferred provision (benefit) for income taxes - federal -33000 595000 -279000 Marketing overhead - - -684
Deferred provision (benefit) for income taxes - state -9000 25000 -9000 Sales force - - -2237
Deferred provision (benefit) for income tax - foreign 76000 27000 15000 Logistics - - -967
Total deferred provision (benefit) for income taxes 34000 647000 -273000 Research & development - - -164
Income tax expense (benefit) 772000 2392000 646000 Central administration - - -1690
Net income (loss) 4029000 1933000 4240000 Other operating expenses -9172 -8882 -8263
Weighted average shares outstanding - basic 1579700 1623800 1657800 Marketing & point-of-sale expenses -3001 - -
Weighted average shares outstanding - diluted 1618400 1659100 1692000 Distribution & selling expenses -4450 - -
Year end shares outstanding 1568000 1601000 1643000 General & administration expenses -1576 - -
Net income (loss) per common share - basic 2.55 1.19 2.56 Sundry expenses -105 - -
Net income (loss) per common share - diluted 2.49 1.17 2.51 Impairment losses (net) on accounts receivable & contract assets -41 - -
Dividends declared per common share 0.86 0.78 0.7 Operating profit 2368 2070 1491
Total number of employees 76700 73100 74400 Interest income from financial instruments measured at amortized cost 24 - 21
Class A common stockholders 13 15 15 Interest income from financial instruments at fair value through profit or loss 0 - 0
Class B common stockholders 23305 22271 22698 Interest income from non-financial assets 0 - -
Foreign currency translation adjustments -173000 -6000 16000 Net foreign exchange gains 26 - 5
Other financial income 7 - 1
Financial income 57 46 28
Interest expense on financial instruments measured at amortized costs -42 - -70
Interest expense on financial instruments at fair value through profit or loss 0 - 0
Interest expense on provisions & non-financial liabilities 0 - 0
Other financial expenses -5 - -4
Financial expenses -47 -93 -74
Income before taxes 2378 2023 1444
Income taxes -669 -668 -426
Net income from continuing operations 1709 1354 1019
Income (losses) from discontinued operations, net of tax -5 -254 1
Net income 1704 1100 1020
Net income attributable to shareholders 1702 1097 1017
Net income attributable to non-controlling interests 3 3 2
Weighted average number of shares outstanding - basic 201.759 202.392 200.188
Weighted average number of shares outstanding - diluted 202.045 204.241 200.188
Year end shares outstanding 199.171 203.861 201.489
Earnings (loss) per share from continuing operations - basic 8.46 6.68 5.08
Basic earnings per share - discontinued operations - - 0.01
Net earnings (loss) per share - basic 8.44 5.42 5.08
Earnings (loss) per share from continuing operations - diluted 8.45 6.63 4.99
Diluted earnings per share - discontinued operations - - 0.01
Net earnings (loss) per share - diluted 8.42 5.38 4.99
Total number of employees 57016 56888 57876

Step 3

For both Firms, use the skills of vertical analysis to convert the income statement items into the percentages of net sales for each of the three years’ income statements, respectively.
Show your work below ADIDAS INCOME STATEMENT
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Adidas AG (NBB: ADDY Y)
Due to changes with International Financial Reporting Standards (IFRS), recent financials statement presentations have been adjusted to meet this standard. Please note the original historical presentations have remained in the original format
Exchange rate used is that of the Year End reported date
As Reported Annual Income Statement As Reported Annual Income Statement (percentage of sales) (percentage of sales) (percentage of sales)
Report Date 5/31/19 (percentage of sales) 5/31/18 (percentage of sales) 5/31/17 (percentage of sales) Report Date 12/31/18 12/31/17 12/31/16
Currency USD USD USD Currency EUR EUR EUR
Audit Status Not Qualified Not Qualified Not Qualified Audit Status Not Qualified Not Qualified Not Qualified
Consolidated Yes Yes Yes Consolidated Yes Yes Yes
Scale Thousands Thousands Thousands Scale Millions Millions Millions
Revenues 39117000 100.00% 36397000 100.00% 34350000 100.00% Net sales 21915 100.00% 21218 100.00% 19291 100.00%
Cost of sales 21643000 55.33% 20441000 56.16% 19038000 55.42% Cost of sales -10552 -48.15% -10514 -49.55% -9912 -51.38%
Gross profit 17474000 44.67% 15956000 43.84% 15312000 44.58% Gross profit 11363 51.85% 10703 50.44% 9379 48.62%
Demand creation expense 3753000 9.59% 3577000 9.83% 3341000 9.73% Royalty & commission income 129 0.59% 115 0.54% 109 0.57%
Operating overhead expense 8949000 22.88% 7934000 21.80% 7222000 21.02% Income from release of accrued liabilities & other provisions 6 0.03% - 0.00% 55 0.29%
Total selling & administrative expense 12702000 32.47% 11511000 31.63% 10563000 30.75% Income from accounts receivable previously written off - 0.00% - 0.00% 3 0.02%
Interest income (expense), net -49000 -0.13% -54000 -0.15% -59000 -0.17% Gains from disposal of fixed assets 10 0.05% - 0.00% 4 0.02%
Other expense (income), net -78000 -0.20% 66000 0.18% -196000 -0.57% Reversals of impairment losses for intangible & tangible assets - 0.00% - 0.00% 2 0.01%
Income (loss) before income taxes - United States 593000 1.52% 744000 2.04% 1240000 3.61% Income from the early termination of promotion & advertising contracts - 0.00% - 0.00% 69 0.36%
Income (loss) before income taxes - foreign 4208000 10.76% 3581000 9.84% 3646000 10.61% Income from the divestiture of the Mitchell & Ness business - 0.00% - 0.00% 39 0.20%
Income (loss) before income taxes 4801000 12.27% 4325000 11.88% 4886000 14.22% Sundry income 32 0.15% - 0.00% 94 0.49%
Current provision (benefit) for income taxes - federal 74000 0.19% 1167000 3.21% 398000 1.16% Other operating income 48 0.22% 133 0.63% 266 1.38%
Current provision (benefit) for income taxes - state 56000 0.14% 45000 0.12% 82000 0.24% Expenditure for marketing investments - 0.00% - 0.00% -1981 -10.27%
Current provision (benefit) for income taxes - foreign 608000 1.55% 533000 1.46% 439000 1.28% Expenditure for point-of-sale investments - 0.00% - 0.00% -540 -2.80%
Total current provision (benefit) for income taxes 738000 1.89% 1745000 4.79% 919000 2.68% Marketing overhead - 0.00% - 0.00% -684 -3.55%
Deferred provision (benefit) for income taxes - federal -33000 -0.08% 595000 1.63% -279000 -0.81% Sales force - 0.00% - 0.00% -2237 -11.60%
Deferred provision (benefit) for income taxes - state -9000 -0.02% 25000 0.07% -9000 -0.03% Logistics - 0.00% - 0.00% -967 -5.01%
Deferred provision (benefit) for income tax - foreign 76000 0.19% 27000 0.07% 15000 0.04% Research & development - 0.00% - 0.00% -164 -0.85%
Total deferred provision (benefit) for income taxes 34000 0.09% 647000 1.78% -273000 -0.79% Central administration - 0.00% - 0.00% -1690 -8.76%
Income tax expense (benefit) 772000 1.97% 2392000 6.57% 646000 1.88% Other operating expenses -9172 -41.85% -8882 -41.86% -8263 -42.83%
Net income (loss) 4029000 10.30% 1933000 5.31% 4240000 12.34% Marketing & point-of-sale expenses -3001 -13.69% - 0.00% - 0.00%
Weighted average shares outstanding - basic 1579700 4.04% 1623800 4.46% 1657800 4.83% Distribution & selling expenses -4450 -20.31% - 0.00% - 0.00%
Weighted average shares outstanding - diluted 1618400 4.14% 1659100 4.56% 1692000 4.93% General & administration expenses -1576 -7.19% - 0.00% - 0.00%
Year end shares outstanding 1568000 4.01% 1601000 4.40% 1643000 4.78% Sundry expenses -105 -0.48% - 0.00% - 0.00%
Net income (loss) per common share - basic 2.55 0.00% 1.19 0.00% 2.56 0.00% Impairment losses (net) on accounts receivable & contract assets -41 -0.19% - 0.00% - 0.00%
Net income (loss) per common share - diluted 2.49 0.00% 1.17 0.00% 2.51 0.00% Operating profit 2368 10.81% 2070 9.76% 1491 7.73%
Dividends declared per common share 0.86 0.00% 0.78 0.00% 0.7 0.00% Interest income from financial instruments measured at amortized cost 24 0.11% - 0.00% 21 0.11%
Total number of employees 76700 0.20% 73100 0.20% 74400 0.22% Interest income from financial instruments at fair value through profit or loss 0 0.00% - 0.00% 0 0.00%
Class A common stockholders 13 0.00% 15 0.00% 15 0.00% Interest income from non-financial assets 0 0.00% - 0.00% - 0.00%
Class B common stockholders 23305 0.06% 22271 0.06% 22698 0.07% Net foreign exchange gains 26 0.12% - 0.00% 5 0.03%
Foreign currency translation adjustments -173000 -0.44% -6000 -0.02% 16000 0.05% Other financial income 7 0.03% - 0.00% 1 0.01%
Financial income 57 0.26% 46 0.22% 28 0.15%
Interest expense on financial instruments measured at amortized costs -42 -0.19% - 0.00% -70 -0.36%
Interest expense on financial instruments at fair value through profit or loss 0 0.00% - 0.00% 0 0.00%
Interest expense on provisions & non-financial liabilities 0 0.00% - 0.00% 0 0.00%
Other financial expenses -5 -0.02% - 0.00% -4 -0.02%
Financial expenses -47 -0.21% -93 -0.44% -74 -0.38%
Income before taxes 2378 10.85% 2023 9.53% 1444 7.49%
Income taxes -669 -3.05% -668 -3.15% -426 -2.21%
Net income from continuing operations 1709 7.80% 1354 6.38% 1019 5.28%
Income (losses) from discontinued operations, net of tax -5 -0.02% -254 -1.20% 1 0.01%
Net income 1704 7.78% 1100 5.18% 1020 5.29%
Net income attributable to shareholders 1702 7.77% 1097 5.17% 1017 5.27%
Net income attributable to non-controlling interests 3 0.01% 3 0.01% 2 0.01%
Weighted average number of shares outstanding - basic 201.759 0.92% 202.392 0.95% 200.188 1.04%
Weighted average number of shares outstanding - diluted 202.045 0.92% 204.241 0.96% 200.188 1.04%
Year end shares outstanding 199.171 0.91% 203.861 0.96% 201.489 1.04%
Earnings (loss) per share from continuing operations - basic 8.46 0.04% 6.68 0.03% 5.08 0.03%
Basic earnings per share - discontinued operations - 0.00% - 0.00% 0.01 0.00%
Net earnings (loss) per share - basic 8.44 0.04% 5.42 0.03% 5.08 0.03%
Earnings (loss) per share from continuing operations - diluted 8.45 0.04% 6.63 0.03% 4.99 0.03%
Diluted earnings per share - discontinued operations - 0.00% - 0.00% 0.01 0.00%
Net earnings (loss) per share - diluted 8.42 0.04% 5.38 0.03% 4.99 0.03%
Total number of employees 57016 260.17% 56888 268.11% 57876 300.02%

Step 4

According to your vertical analysis in step 3, type in the calculated percentage into the following table for both firms.
Firm A Firm B
2017 2016 2015 2017 2016 2015
Net Sales 100% 100% 100% 100% 100% 100%
Cost of Goods Sold 55.33% 56.16% 55.42% 48.15% 49.55% 51.38%
Gross Margin 44.67% 43.84% 44.58% 51.85% 50.44% 48.62%
Selling & Administrative expenses 32.47% 31.63% 30.75% 27.40% 0.00% 0.00%
Net Income 10.30% 5.31% 12.34% 10.30% 5.31% 12.34%
(You can modify this table to accommodate your income statement format)
Report your observations in less than 100 words
Annual Cost of sales seem to be highest in 2016 for Firm A registering 55.42% and firm B and 2015registering 51.38%.Cost of sales for Firm B is gradual;ly decreasing from 2016-2019(51.38%,49.55%, and 48.15%) respectively.For Firm A, Gross margin is ranging from 44.58 in 2016 to 43.84% in 2017 and 44.67% in 2019.For Firm B,Gross margin ranges from 51.38% in 2015,50.44% in 2016 and 51.855 in 2017.The net income for both firms is highest in 2015 and lowest in 2016 then rises again in 2017.
You need to correct your grammatical errors and make the writing here more clear. Your idea is okay but the sentences do not flow well.

Step 5

For both firms, use the skills of horizontal analysis to compute the percentage changes across years for each income statement item
Show your work below
NIKE HORIZONTAL ANALYSIS
As Reported Annual Income Statement ADIDA HORIZONTAL ANALYSIS
Report Date 5/31/19 5/31/18 5/31/17 As Reported Annual Income Statement
Currency USD USD USD Report Date 12/31/18 12/31/17 12/31/16
Audit Status Not Qualified Percentage change(Horizontal) Not Qualified Percentage change(Horizontal) Not Qualified Currency EUR EUR EUR
Consolidated Yes 2018 VS 2017 Yes 2017 VS 2017 Yes Audit Status Not Qualified Percentage change(Horizontal) Not Qualified Percentage change(Horizontal) Not Qualified
Scale Thousands Thousands Thousands Consolidated Yes 2018 VS 2017 Yes 2017 VS 2017 Yes
Revenues 39117000 7.47% 36397000 6.0% 34350000 Scale Millions Millions Millions
Cost of sales 21643000 5.88% 20441000 7.4% 19038000 Net sales 21915 3.28% 21218 9.99% 19291
Gross profit 17474000 9.51% 15956000 4.2% 15312000 Cost of sales -10552 0.36% -10514 6.07% -9912
Demand creation expense 3753000 4.92% 3577000 7.1% 3341000 Gross profit 11363 6.17% 10703 14.12% 9379
Operating overhead expense 8949000 12.79% 7934000 9.9% 7222000 Royalty & commission income 129 12.17% 115 5.50% 109
Total selling & administrative expense 12702000 10.35% 11511000 9.0% 10563000 Income from release of accrued liabilities & other provisions 6 0.00% - 0.00% 55
Interest income (expense), net -49000 -9.26% -54000 -8.5% -59000 Income from accounts receivable previously written off - 0.00% - 0.00% 3
Other expense (income), net -78000 -218.18% 66000 -133.7% -196000 Gains from disposal of fixed assets 10 0.00% - 0.00% 4
Income (loss) before income taxes - United States 593000 -20.30% 744000 -40.0% 1240000 Reversals of impairment losses for intangible & tangible assets - 0.00% - 0.00% 2
Income (loss) before income taxes - foreign 4208000 17.51% 3581000 -1.8% 3646000 Income from the early termination of promotion & advertising contracts - 0.00% - 0.00% 69
Income (loss) before income taxes 4801000 11.01% 4325000 -11.5% 4886000 Income from the divestiture of the Mitchell & Ness business - 0.00% - 0.00% 39
Current provision (benefit) for income taxes - federal 74000 -93.66% 1167000 193.2% 398000 Sundry income 32 0.00% - 0.00% 94
Current provision (benefit) for income taxes - state 56000 24.44% 45000 -45.1% 82000 Other operating income 48 -63.91% 133 -50.00% 266
Current provision (benefit) for income taxes - foreign 608000 14.07% 533000 21.4% 439000 Expenditure for marketing investments - 0.00% - 0.00% -1981
Total current provision (benefit) for income taxes 738000 -57.71% 1745000 89.9% 919000 Expenditure for point-of-sale investments - 0.00% - 0.00% -540
Deferred provision (benefit) for income taxes - federal -33000 -105.55% 595000 -313.3% -279000 Marketing overhead - 0.00% - 0.00% -684
Deferred provision (benefit) for income taxes - state -9000 -136.00% 25000 -377.8% -9000 Sales force - 0.00% - 0.00% -2237
Deferred provision (benefit) for income tax - foreign 76000 181.48% 27000 80.0% 15000 Logistics - 0.00% - 0.00% -967
Total deferred provision (benefit) for income taxes 34000 -94.74% 647000 -337.0% -273000 Research & development - 0.00% - 0.00% -164
Income tax expense (benefit) 772000 -67.73% 2392000 270.3% 646000 Central administration - 0.00% - 0.00% -1690
Net income (loss) 4029000 108.43% 1933000 -54.4% 4240000 Other operating expenses -9172 3.27% -8882 7.49% -8263
Weighted average shares outstanding - basic 1579700 -2.72% 1623800 -2.1% 1657800 Marketing & point-of-sale expenses -3001 0.00% - 0.00% -
Weighted average shares outstanding - diluted 1618400 -2.45% 1659100 -1.9% 1692000 Distribution & selling expenses -4450 0.00% - 0.00% -
Year end shares outstanding 1568000 -2.06% 1601000 -2.6% 1643000 General & administration expenses -1576 0.00% - 0.00% -
Net income (loss) per common share - basic 2.55 114.29% 1.19 -53.5% 2.56 Sundry expenses -105 0.00% - 0.00% -
Net income (loss) per common share - diluted 2.49 112.82% 1.17 -53.4% 2.51 Impairment losses (net) on accounts receivable & contract assets -41 0.00% - 0.00% -
Dividends declared per common share 0.86 10.26% 0.78 11.4% 0.7 Operating profit 2368 14.40% 2070 38.83% 1491
Total number of employees 76700 4.92% 73100 -1.7% 74400 Interest income from financial instruments measured at amortized cost 24 0.00% - 0.00% 21
Class A common stockholders 13 -13.33% 15 0.0% 15 Interest income from financial instruments at fair value through profit or loss 0 0.00% - 0.00% 0
Class B common stockholders 23305 4.64% 22271 -1.9% 22698 Interest income from non-financial assets 0 0.00% - 0.00% -
Foreign currency translation adjustments -173000 2783.33% -6000 -137.5% 16000 Net foreign exchange gains 26 0.00% - 0.00% 5
Other financial income 7 0.00% - 0.00% 1
Financial income 57 23.91% 46 64.29% 28
Interest expense on financial instruments measured at amortized costs -42 0.00% - 0.00% -70
Interest expense on financial instruments at fair value through profit or loss 0 0.00% - 0.00% 0
Interest expense on provisions & non-financial liabilities 0 0.00% - 0.00% 0
Other financial expenses -5 0.00% - 0.00% -4
Financial expenses -47 -49.46% -93 25.68% -74
Income before taxes 2378 17.55% 2023 40.10% 1444
Income taxes -669 0.15% -668 56.81% -426
Net income from continuing operations 1709 26.22% 1354 32.88% 1019
Income (losses) from discontinued operations, net of tax -5 -98.03% -254 -25500.00% 1
Net income 1704 54.91% 1100 7.84% 1020
Net income attributable to shareholders 1702 55.15% 1097 7.87% 1017
Net income attributable to non-controlling interests 3 0.00% 3 50.00% 2
Weighted average number of shares outstanding - basic 201.759 -0.31% 202.392 1.10% 200.188
Weighted average number of shares outstanding - diluted 202.045 -1.08% 204.241 2.02% 200.188
Year end shares outstanding 199.171 -2.30% 203.861 1.18% 201.489
Earnings (loss) per share from continuing operations - basic 8.46 26.65% 6.68 31.50% 5.08
Basic earnings per share - discontinued operations - 0.00% - 0.00% 0.01
Net earnings (loss) per share - basic 8.44 55.72% 5.42 6.69% 5.08
Earnings (loss) per share from continuing operations - diluted 8.45 27.45% 6.63 32.87% 4.99
Diluted earnings per share - discontinued operations - 0.00% - 0.00% 0.01
Net earnings (loss) per share - diluted 8.42 56.51% 5.38 7.82% 4.99
Total number of employees 57016 0.23% 56888 -1.71% 57876

Step 6

According to your horizontal analysis in step 5, type in the calculated percentage into the following table for both firms.
Firm A Firm A Firm B Firm B
% change from 2017 to 2018 % change from 2016 to 2017 % change from 2017 to 2018 % change from 2016 to 2017
Net Sales 7.47% 6.00% 3.28% 9.99%
Cost of Goods Sold 5.88% 7.40% 0.36% 6.07%
Gross Margin 9.51% 4.20% 6.17% 14.12%
Selling & Administrative expenses 10.35% 9.00% 0.00% 0.00%
Net Income 11.01% -11.50% 0.00% 0.00%
EPS diluted 112.82% 53.40% 0.00% 0.00% Please address this question.
(You can modify this table to accommodate your income statement format)
(You can select any income statement items that matter for your analysis)
Report your observations in less than 100 words

Step 7

Under the Company Financials Tab, click on ratios tab to download 5 years’ financial ratios in Excel format for both firms.
Copy and Paste your 5 years’ financial ratios in Excel format for both firms.
Firm A
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NIKE Inc (NYS: NKE)
Exchange rate used is that of the Year End reported date
Profitability Ratios 5/31/19 5/31/18 5/31/17 5/31/16 5/31/15
ROA % (Net) 17.42 8.44 18.99 17.44 16.29
ROE % (Net) 42.74 17.4 34.38 30.04 27.82
ROI % (Operating) 37.11 29.36 32.4 32.74 32.36
EBITDA Margin % 14.2 14.08 16.45 16.34 15.81
Calculated Tax Rate % 16.08 55.31 13.22 18.67 22.16
Revenue per Employee 510000 497907 461694 456684 488834
Liquidity Ratios 5/31/19 5/31/18 5/31/17 5/31/16 5/31/15
Quick Ratio 1.14 1.45 1.8 1.62 1.47
Current Ratio 2.1 2.51 2.93 2.8 2.52
Net Current Assets % TA 36.51 40.35 45.52 45.18 44.64
Debt Management 5/31/19 5/31/18 5/31/17 5/31/16 5/31/15
LT Debt to Equity 0.38 0.35 0.28 0.16 0.08
Total Debt to Equity 0.38 0.39 0.31 0.17 0.1
Interest Coverage 98.98 81.09 83.81 244.32 151.18
Asset Management 5/31/19 5/31/18 5/31/17 5/31/16 5/31/15
Total Asset Turnover 1.69 1.59 1.54 1.5 1.52
Receivables Turnover 10.07 10.15 9.93 9.79 9.01
Inventory Turnover 3.98 3.96 3.85 3.79 3.99
Accounts Payable Turnover 16 16.82 16.21 14.94 15.07
Accrued Expenses Turnover 9.45 11.59 11.36 9.24 9.5
Property Plant & Equip Turnover 8.51 8.62 9.15 9.89 10.47
Cash & Equivalents Turnover 8.98 9.03 9.89 9.24 10.08
Per Share 5/31/19 5/31/18 5/31/17 5/31/16 5/31/15
Cash Flow per Share 3.74 3.05 2.2 1.82 2.72
Book Value per Share 5.77 6.13 7.55 7.29 7.41
Firm B
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Adidas AG (NBB: ADDY Y)
Exchange rate used is that of the Year End reported date
Profitability Ratios 12/31/18 12/31/17 12/31/16 12/31/15 12/31/14
ROA % (Net) 11.3 7.39 7.11 4.92 4.08
ROE % (Net) 26.54 16.98 16.71 11.23 8.82
ROI % (Operating) 30.79 26.44 18.53 14.13 12.33
EBITDA Margin % 13.12 9.53 9.42 8.18 7.95
Calculated Tax Rate % 27.59 33.02 29.48 33.97 32.46
Revenue per Employee 384366 372978 332405 304473 270496
Liquidity Ratios 12/31/18 12/31/17 12/31/16 12/31/15 12/31/14
Quick Ratio 0.82 0.69 0.7 0.76 0.92
Current Ratio 1.44 1.37 1.31 1.4 1.68
Net Current Assets % TA 19.08 16.21 13.98 15.99 23.91
Debt Management 12/31/18 12/31/17 12/31/16 12/31/15 12/31/14
LT Debt to Equity 0.25 0.15 0.15 0.26 0.28
Total Debt to Equity 0.26 0.17 0.25 0.32 0.33
Interest Coverage 133.61 270.44 29.55 23.53 19.62
Asset Management 12/31/18 12/31/17 12/31/16 12/31/15 12/31/14
Total Asset Turnover 1.45 1.43 1.35 1.31 1.21
Receivables Turnover 9.26 8.87 8.03 7.93 7.74
Inventory Turnover 2.96 2.82 2.88 3.1 2.95
Accounts Payable Turnover 10.25 9.49 8.51 9.2 8.36
Accrued Expenses Turnover 9.77 9.59 9.35 10.84 12.13
Property Plant & Equip Turnover 10.34 10.84 10.83 10.94 10.8
Cash & Equivalents Turnover 10.37 13.65 13.38 11.1 8.89
Per Share 12/31/18 12/31/17 12/31/16 12/31/15 12/31/14
Cash Flow per Share 13.11 8.14 6.72 5.41 3.36
Book Value per Share 32.02 31.64 32.12 28.3 27.52

Step 8

Based on the ratios in step 7, comment on comparison of:
Liquidity of these two firms (less than 100 words)
Liquidity ratio (Current ratio)of frim A is positive and above one.This shows currents assets are more thatn current liabilities and therefore the firm is able to meet its short trm operating obligations.Liquid Ratio(Current ratio) of fiem B is below 1.This shows that the firm current assets are not equal to its short term liabilities and hence the firm is struggling to meet its operating costs.there is a deficit in current assets. What is your observation based on their historical patterns?
Do you have only one liquidity ratio?
?
What is your conclusion by comparing these two firms?
Profitability of these two firms (less than 100 words)
for Firm A(Nike), ROA is highest in yeat 2017 and ROE highest in year 2019.This shows assets and Equity are being utilised well to maximise on returns.For firm B,ROA and ROE is highest in 2019 and lowest in 2015 respectively.However, Both ROE abd ROE have consistently increase all through from 2015 to 2019 showung that the firm is increasing utilizing assets and equity to maximise on returns. Why?
You need to improve your wiritng in this area. It does not flow well and your wiritng is not clear for what you want to express
There are many typos and grammatical errors.
What is your conclusion by comparing these two firms?
For Firm B,
Solvency of these two firms (less than 100 words)
Solvency of these two firms A and B(Indicate the financial health with regard to debt).Total to equity for firm A, Highest in 2014(0.3) and lowest in 2017(0.17).This is a safe state.However, Interest charges appear minimal at 2014(19.62) compared to 2017(210.44).The unproportioanl interest can be due to inflation and rise in the nterest rates.For Firm B, total Debt To equity is higest in 2017 and lowest in 2014.However, interest coverage is highest in 2015(151.18) and lowest at 2017(81.09).However, debt has not suppirsed equity for both firms hence their solvency is sound and above requirement Incomplete sentence
What is your conclusion by comparing these two firms?

Step 9

Under Equity Pricing tab, produce a price change chart including price changes of Firm A and Firm B in the past 3 years
Take a screenshot of your chart and paste here
Price changes for Nike Price Changes for Adidas
Need to address this question.
In Step 6 you compared the key income statement items of Firm A and Firm B across three years using horizontal analysis.
Is the market performance of these two firms based on the price change chart consistent with the result of your horizontal analysis based on income statement items?
(Less than 50 words)

Step 10

Under reports tab, download the most recent 10-K report of firm A. Use the 10-K report to answer the following questions for Firm A.
Who is the auditor of the 10-K report?
Auditing Firm: (e.g., KPMG) Pricewatershouse Coopers LLD
Read the Auditors’ Report and indicate the major conclusion in their opinions (less than 50 words)
Major Conclusions: Audit was perfomed to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due toerror or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Procedures peforemd included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.The Company's sales-related reserve balance, which includes returns, post-invoice sales discounts and miscellaneous claims.The audit opinion was unqualified.
OK