Financial performance analysis: a case study of Nike

Abstract

Sports industry is closely related to people's life. The paper studies financial performance analysis among the sports industry in a case study of Nike and puts forward improvement suggestions to increase cash flow, increase stock dividends, reduce debts. NKE stock price and annualized dividend in 2015 to 2019 are graphed in the introduction and dividend prediction is conducted by using dividend discount model with the historical average growth rate. The primary analysis is based on the fiscal years 2015 to 2019, which ended each year on May 31, including applying horizontal analysis, trend analysis on Nike. The deeper analysis conducts ratio analysis comparing with Nike’s biggest market competitor Adidas. The income statement of Nike in recent 5 years are selected and analyzed, of which the horizontal analysis is based on the last two years, while the trend analysis is based on the data of the last five years. The ratio analysis concentrates on ROE.