...Gap Inc. and Nike, Inc. Overview Gap Inc. and Nike, Inc. Overview Financial Performance: Nike, Inc and Gap Inc. Nike, Inc. and Gap Inc. achieved top ranks for specialty retailers of 2007 according to CRO (Corporate Responsibility Officer, 2007) Magazine for “100 Best Corporate Citizens 2007.” Shareholders review various financial reports which help determine which organization yields the greatest profits and minimum loss in cash flow. This review contains two-year comparisons for Nike, Inc. and Gap Inc. by analyzing ratios for Liquidity and Asset Utilization, Debt and Interest Coverage, and Market based ratios. Analysts evaluate market and industry trends periodically that help determine where a company is most profitable. Usually, stockholders are interested in profitability ratios. However, lenders and suppliers favor liquidity ratios detailing how assets compare with current liabilities. Respectively, according to results for Liquidity and Asset Utilization, the current ratios, (current assets / current liabilities) shows for every $1.00 of current liabilities for Nike, Inc. has 3.1:1 (2007) and 2.8:1 (2006). On the other hand, Gap Inc. has 2.2:1 (2007) and 2.7:1 (2006). Specialty retailers’ average return is greater than 3 and the general retail average is 1.0 - 1.2. Nike, Inc. at 3.1:1 (2007) has the greatest financial responsibility to pay bills over the next year timely. However, Gap Inc. also has money to meet obligations with a 2.7:1 (2006) which is generally...
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...35 | (NKE) (NKE) Stock Chart for the last 3 months Stock Chart for the last 3 months Performance Evaluation (Feb, 2012 -Jan, 2014) Performance Evaluation (Feb, 2012 -Jan, 2014) Key Statistics (Vs Major Competitor) Key Statistics (Vs Major Competitor) Introduction NIKE, Inc. is an American multinational company that is involved in the athletic industry. The company focuses on the branding, marketing, designing, and development of several athletic equipment, shoes, and apparel. It is one of the world’s largest supplier of athletic shoes and apparel with the Jordan Brand being its biggest name brand. The NIKE swoosh is valued at around $10.7 billion, and is one of the most valuable brand among sports business. Stock Performance Looking at the three measures of risk adjusted performances shows that Nike as a stock has been for the most part successful in its performance. The Jensen’s Alpha of a 1.18 shows that Nike has outperformed the market. On the other hand, the Sharpe Ratio of Nike as a 0.27 illustrates that as an individual stock it has also had a good performance since Nike would earn an annual risk premium of a 0.27 per 1 percent of portfolio total risk. The positive 0.27 ratio is representative of a good performance, but when compared to the S&P 500 Sharpe Ratio the Nike stock appears to have been underperforming against the market. Finally, the Treynor Ratio puts Nike outperforming the...
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...Elsevier’s archiving and manuscript policies are encouraged to visit: http://www.elsevier.com/copyright Author's personal copy Organizational Dynamics (2010) 39, 353—356 a v a i l a b l e a t w w w. s c i e n c e d i r e c t . c o m journal homepage: www.elsevier.com/locate/orgdyn Why Nike kicks butt in sustainability Marc J. Epstein, Adriana Rejc Buhovac, Kristi Yuthas Nike Inc. has a unique combination of capabilities and competencies that position the company as a leader in sustainability. Nike is among the world’s most prominent sustainable corporations, and is regularly recognized by organizations that rank sustainable performance. For example, Nike has been named one of 100 most sustainable corporations in the world by Innovest, ranked third in Corporate Responsibility Officers 100 Best Corporate Citizens list, and named one of the World’s Top Sustainable Stocks by Sustainable Business. Nike possesses a unique combination of strengths and capabilities that enable the company to make rapid advancements in sustainability that are ahead of other firms in its industry, and that increasingly contribute to the financial performance of the company. Nike believes that we are at the beginning of a shift from a service- or...
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...developer and retailer of performance apparel, footwear and accessories for athletic use. Under Armour was started in 1996 by former University of Maryland football player Kevin Plank with the belief that athletes needed a good alternative to the basic cotton t-shirt for their workouts. After working with multiple fabric companies to develop an advanced moisture wicking fabric, Mr. Plank began selling tight-fitting base layer tops and bottoms from his corporate headquarters in his grandmother’s basement. Twelve years later, Under Armour has grown into an internationally recognized leader in high performance athletic clothing. Net incomes have grown exponentially since the company’s inception.  Under Armour has fed this growth with strategic partnerships with the NFL, college football teams, and numerous star athletes. The company has moved beyond its initial base layer clothing meant to be worn “under armour.” Under Armour now produces clothing, footwear, and accessories for baseball, golf, cross-training, military/tactical use, hunting, and assorted other athletic or outdoor disciplines. Dedicated displays at large retailers such as Dick’s Sporting Goods and Sports Authority and Under Armour retail outlets are helping to grow the brand and its dedicated customer base. Under Armour revolutionized the world of athletic wear and created products that are considered a necessity to increase comfort and performance during athletic training...
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...Founded in 1962, by Bill Bowerman and Phil Knight as a partnership under the name, Blue Ribbon sports, now named Nike Inc., is a $10.7 Billion brand and is arguably the most valuable brand among sports businesses. Consistently ranked one of the best places to work, Nike has created a corporate culture rich with employee loyalty and team spirit. Keeping with the sports theme and culture Nike’s red swoosh is all throughout the company facilities, the corporate head quarters is called campus, employees are called players and coaches, and the meetings are even called huddles. Nike asks it players (employees) to work by two principals above all others, “Honesty first, and competition second. Compete with yourself not your colleagues.” Nike’s leadership and top management style can be characterized by the team management approach. This style of leadership leads to relationships of trust and respect. As the website states, “At NIKE, Inc., we believe that a talented, diverse and inclusive employee base helps drive the creativity that is central to our brands. Our employee base includes a broad range of functions and roles globally, from brand and category experts to footwear designers and retail workers, from specialists in logistics, customs, tax and trade, to distribution-center managers and many, many more.” (nike.com) Adidas is a German multinational corporation that designs and manufactures sports clothing and accessories based in Herzogenaurach, Germany. The company was...
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...Athletic Footwear and Apparel Industry GROUP 7: Kirsten Ross April Rust Wenjun Zhao Elizabeth Poe Xaio Li Juexin Feng Friday, February 24, 2012 *link for photo: Deviantart nike 1 NAICS/SIC Codes NAICS code SIC Code 316211 316211 316219 316219 316219 316219 316219 316219 316219 316219 3021 3021 3149 3149 3149 3149 3149 3149 3149 3149 Description Athletic shoes, plastics or plastics soled fabric upper (except cleated), manufacturing. Athletic shoes, rubber or rubber soled fabric upper (except cleated), manufacturing. Athletic shoes (except rubber or plastics soled with fabric upper) manufacturing. Cleated athletic shoes manufacturing. Footwear, athletic (except rubber or plastics soled with fabric upper), manufacturing. Golf shoes, men’s cleated, manufacturing. Golf shoes, women’s cleated, manufacturing. Leather upper athletic footwear manufacturing. Shoes, athletic (except rubber or plastics soled with fabric upper), manufacturing. Vinyl upper athletic footwear manufacturing. Friday, February 24, 2012 2 Major Economic Characteristics of the Industry • Billion dollar industry • This market is beginning to decline somewhat, however experts expect there could still be some small bursts of growth occasionally. • Characterized by having a small number of large players. Friday, February 24, 2012 3 Industry Driving Forces • Fashion trends (+) • Change in society (healthy lifestyle) (+) • Changes in consumer sports preferences (sport popularity)...
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...maximize their wealth. This paper explores the principle for compensation, makes an attempt to design a new compensation package to the chief executive officer of Nike, Inc., and finally compare the different between the existing pay package and the new one. I. Introduction Nike, which originally named as Blue Ribbon Sports, is the largest manufacturer of the athletic footwear and apparel in the world, and one of the Fortune 500 companies. Figure1 shows that Nike is the leader of the global athletic footwear market, with around 31% market share in 2007. Creating by Bill Bowerman and Philip Knight in 1962, its early products are footwear, but now it has a wide range of product line. Today Nike is engaged in design, development and marketing of footwear, apparel and equipment, including shoes, sock, gloves, bags, and sports balls and so on. Many of its products are design for specific athletic such as football, basketball, running and even walking. According to figure2, Nike branded footwear contributes about 43.6% of Nike’s stock, while Nike branded apparel constitutes around 24.7%. It means that Nike branded footwear and apparel is the most important parts of its product line. Because the importance and popularity of sport, the sportswear market has a huge profit, a great prospect, and a fierce competition. Nike major competitors include Adidas, Puma, and...
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...Nike Inc. and supply-chain-software supplier i2 Technologies are pointing fingers at each other for a flawed i2 implementation that upset Nike's inventory and ultimately forced the footwear maker to slash earnings estimates. Nike officials said an i2 supply-and-demand-planning application didn't perform as expected, resulting in shortages of some footwear models and excess stock of others. Executives at i2 (stock: ITWO), however, maintain that the problem was caused not by the software itself, but by Nike's customized implementation. Regardless of who's to blame, the resulting inventory shortages will reduce Nike's fiscal third-quarter sales by as much as $100 million. Earnings estimates for the quarter, which ended this week, have been cut to 34 to 38 cents per share from 50 to 55 cents. Nike has been working on its i2 software implementation since June as part of a $400 million overhaul designed to streamline communications with buyers and suppliers and lower operating costs. The i2 software failed to meet expectations "both in performance and functionality," a Nike spokeswoman said. "This is what we get for our $400 million?" Nike chairman Philip Knight asked financial analysts when the company issued its earnings warning earlier this week. Nike and i2 have "created some technical and operational workarounds" and the implementation is now stable, the spokeswoman said, but the financial impact of the problem will be felt for six to nine months, until Nike can...
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...business of business is business’ (Milton Friedman, 1970, New York Time magazine) Build a strong brand image -Branding is at the centre of reputation management, it requires a clear corporate mission and philosophy. -Trust and credibility from public are indispensable to build a strong brand image (Schweizer & Wijnberg, 1999). -Brand personality and identity must be clearly understood by each stakeholders to portray the brand values. -The culture and values of a brand are a key part of the brand image. Improve Financial performances -Good reputation leads to higher customer retention (Caminiti, 1992; Preece et al., 1995) so increase repurchasing. -Customers are willing to pay higher prices for a product/service sold by a company with a good reputation. -Good reputation improve customers satisfaction (Markus Eberl and Manfred Schwaiger, 2004). -Past financial performances can impact the current reputation which can impact the future financial performances. -All of these elements have a positive impact on profit. Develop relationship with stakeholders -“Any group or individual who can affect or is affected by the achievement of an organisation’s objectives” (Freeman, 1984, p.46). -Shareholders, customers, employees, business partners, media, government, local communities, environment. -The company must communicate efficiently, transparently and use different ways of communication for each stakeholder to maintain and develop strong relationship (Benjamin A. Neville...
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...share in China – Li Ning. It is worth noting that Nike does not have a Chinese online website store to facilitate customers to come online and learn/buy Nike’s products. b. Price sensitivity – Developing markets are generally price sensitive markets. Nike’s premium and high quality brand image doesn’t sync with the expectations of the customer. In other words, the differentiation strategy might not bring as good results as it had brought in the USA. 3. Significant reliance on IT and sophistication in managing supply chains. Nike is heavily dependent on information technology systems across our supply chain, including product design, production, forecasting, ordering, manufacturing, transportation, sales, and distribution. Nike’s ability to effectively manage and maintain our because the product design and innovation forms the backbone of the company. Nike success 1. The key reasons for the success of Nike are associated with its global brand promotion. Due to its extensive advertising campaigns the Nike’s brand is known in almost every household worldwide. 2. Nike (now, called the unofficial sponsor!) has generated the most buzz online in the lead up to the World Cup. Much greater than Adidas, it’s arch-rival and official sponsor. Coca Cola, Sony, Visa and other FIFA partners are lagging far behind. 3. Nike shoes and other accessories have also become the favorite fashion products for teenagers. 4. Nike is known around the world for being one of the iconic...
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...Long Term Financial Planning Name: Institution: Date: Goal setting will have benefits for Nike. It is a very important managerial role for this incorporation. One of the benefits of setting the objectives is that it will improve the profitability of Nike. According to the Chief Financial Officer, the incorporation is looking forward to achieving a high single digit growth in revenue. The growth in EPS is expected to be in the range of 15% to 17%. In addition, the incorporation aims at having a 25% return on investments. The incorporation has divided its goals in terms of quarters in a financial year. The goals in this case are maintaining the DPS at 25% to 35% of total expenditure. By setting these goals, Nike Incorporation will be in a position to attain the objectives. In the absence of goal setting the incorporation would not have estimated an attainment of such goals. This is because the goals would not have been there in the first place (Blair, 2010). The second importance of goal setting to Nike Incorporation will be the increase in efficiency. Nike will be able to increase its efficiency since it will be brought about by the need to increase its profitability. For this incorporation to achieve a high performance there will be a need to improve the way it operates. At this point, this incorporation wishes to enhance its global retail business. This is intended to improve the customer experience of the different groups and also promote the idea category in all major markets...
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...9 Nike Business Overview 117 9 Nike’s Business Overview Business Overview: Nike, Inc. is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Virtually all Nike products are manufactured by independent contract manufacturers, many of which produce for other globally recognized brands. Most Nike products are made outside of the United States. Nike, Inc. also includes six U.S.-based wholly owned subsidiaries. This report covers activities of the Nike brand, as well as Brand Jordan and Nike Golf, which together represent about 90 percent of company revenues, unless where otherwise noted. Nike has a long-term goal of incorporating subsidiary companies into its corporate responsibility efforts and reporting. Nike, Inc Subsidiaries Cole Haan Holdings Inc., based in Maine, sells dress and casual footwear and accessories for men and women under the brand names of Cole Haan, g Series and Bragano. Nike Bauer Hockey Inc., based in New Hampshire, manufactures and distributes hockey ice skates, apparel and equipment, as well as equipment for in-line skating and street and roller hockey. Hurley International LLC, based in California, designs and distributes action sports apparel for surfing, skateboarding and snowboarding, and youth lifestyle apparel and footwear. Nike IHM Inc., based in Oregon, makes AIR-SOLE cushioning components used in Nike footwear products...
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...it mandatory to focus on customer retention(Hong and John,2010)An organization’s success depends on its strategy decisions and to be successful, it is important to implement out of the box strategies. This report examines the sportswear industry and its major players’ marketing activities and strategies within a competitive environment, which will then lead to a strategic brand direction for a brand. Favorable trends have been observed in the sportswear industry, creating great opportunities for brands to capitalize on. The sector is observed to be highly profitable in the upcoming years with fast catching trends. It is a highly competitive market with majors players such as, Nike and Adidas leading the sector. Other popular brands such as, Puma and Under Armour have not been far behind. The industry has seen a tremendous growth in the demand of sports apparel in recent years. A high increase...
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...of Profitability Return on Equity | 2012 | Under Armour | 15.8% | Nike, Inc. | 21.4% | The return on assets ratio measures how effectively a company can earn a return on its investment in assets. In other words, ROA shows how efficiently a company can covert the money used to purchase assets into net income or profits. Based on Nike, Inc.’s ROE of 21.4%, it can be concluded that Nike, Inc. could be more efficient in utilizing its equity base and may have a better return to investors than Under Armour, whose ROE is 15.8%. Return on Assets | 2012 | Under Armour | 11.1% | Nike, Inc. | 14.4% | The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to generate profits from its shareholders investments in the company. In other words, the return on equity ratio shows how much profit each dollar of common stockholders' equity generates. Based on Nike, Inc.’s ROA of 14.4%, it can be determined that Nike, Inc. is may be more efficient in managing the utilization of its asset base versus Under Armour, whose ROA is 11.1%. The higher the ratio the better profit gain the company produces. Financial Leverage Percentage | 2012 | Under Armour | 4.7% | Nike, Inc. | 7% | The financial leverage percentage measures the advantage or disadvantage that occurs when a company’s return on equity differs from its return on assets. Under Armour’s financial leverage ratio (4.7%) is lower because it utilizes less debt in its capital...
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...NIKE Annual Report Project Introduction: This project is aimed with the review of the financial statements and financial performance of Nike Inc for the year ended May 31, 2012. NIKE, Inc., together with its subsidiaries, engages in the design, development, marketing, and sale of footwear, apparel, equipment, and accessories for men, women, and children worldwide. The company offers products in seven categories, including running, basketball, football, men’s training, women’s training, NIKE sportswear, and action sports. It also markets products designed for kids, as well as for other athletic and recreational uses, such as baseball, cricket, golf, lacrosse, outdoor activities, football, tennis, volleyball, walking, and wrestling. The registered address of the company is: “Nike Inc. One Bowerman Drive Beaverton, OR 97005-6453 United States - Map Phone: 503-671-6453 Fax: 503-671-6300 Website: http://www.nikeinc.com” Financial Statements: The financial statements of any company consist of the following statements: • Income statement – A measure of how much company has earned from the operations in a given period of time • Balance Sheet – A measure of the financial position of the company at a specific date • Cash Flow Statement – A measure of cash generation or usage from operating, investing and financing activities during a specific period of time • Statement of changes in owner’s equity – This statement refer to the changes in the share capital due to...
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