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NIKE

Nike requires debt financing to fund its operations at the Nike Park Imus District branch. Bank loans would provide reliable funding secured by business assets. Projections show total annual sales of $332,790 with net income of $35,090. The branch is expected to achieve a return on investment of 21.82%, above the store average.

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58 views

NIKE

Nike requires debt financing to fund its operations at the Nike Park Imus District branch. Bank loans would provide reliable funding secured by business assets. Projections show total annual sales of $332,790 with net income of $35,090. The branch is expected to achieve a return on investment of 21.82%, above the store average.

Uploaded by

Dave Mendoza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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NIKE - FINANCIALS

 Capital. Requirements/Source of Funds


Nike Park Imus District branch, supplier of athletic shoes and apparel, requires effective
financing to be successful and strategic. The best source of raising funds would be debt
financing. In debt financing, Nike would have to borrow funds from the banks or domestic
securities market. The bank loans are often secured against business assets, and often range in
amount according to the security and prospects of the business. Bank loans have some
advantages in that they are reliable and secure as Nike, Inc. would be assured of the amount
required to fund the campaign.

 Sales Forecast

JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APRIL MAY

TOTAL 15,796 13,952 18,666 13,681 13,431 10,151 25,984 16,010 16,173 16,143 16,750 16,754
SALES

 Projected Income Statement

INCOME STATEMENT
REVENUES 332,790
COST OF SALES 179,810
TOTAL SELLING AND ADMIN EXPENSES 107,580
EARNINGS BEFORE INTEREST AND TAXES 45,400
INTEREST EXPENSE 300
TAXES 10,010
NET INCOME 35,090

ASSETS
CASH 38,520
RECEIVABLES 36,510
INVENTORY 47,160
PREPAID EXPENSES AND OTHER CURRENT ASSETS 21,400
CURRENT ASSETS 164,310
IDENTIFIABLE TANGIBLE ASSETS 2,800
DIFFERED INCOME TAXES and OTHER ASSETS 22,010
TOTAL ASSETS 168,400

LIABILITIES
NOTES PAYABLE 3,250
ACCOUNTS PAYABLE 23,170
ACCRUED EXPENSES 42,960
LONG TERM DEBT-CURRENT 1,420
CURRENT LIABILITIES 70,800
LONG TERM DEBT 9,370
DEFERRED INCOME TAXES and OTHER LIABILITIES 14,000
TOTAL LIABILITIES 21,470
OWNER’S EQUITY 141,160
RETAINED EARNINGS 60,100
TOTAL LIABILITIES & EQUITY 168,400

 ROI Analysis

HIGH AVERAGE LOW


87.01% 21.82% 12.99%
(DECEMBER) (NOVEMBER)

Nike Park Imus Branch will achieve return on average invested assets of 21.82 %, which is above
store average return on investment.

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