Nike vs. Reebok Financial Results Analysis (Fiscal Year 1998-2002)

Outlines I. Background -------------------------------------- 3 II. Financial Ratios analytic thinking ----------------------- 3 III. WACC Analysis ----------------------------------- 9 IV. Working cap Management ---------------------- 13 V. Dividend Policy and levy Treatment Impacts -------- 15 VI. Comments ----------------------------------------- 15 Assumptions and Notes ---------------------------- 17 I Background Nike, Inc., a lock away room corporation incarnate in 1968, and Reebok International Ltd., a mum corporation unionised in 1979, are twain spheric companies engaged in the design and merchandiseing of sports and fitness products. We seize for analyze their past vanadium years financial reports to estimate who would be the preferred considerable keep company in the stock food market. Before we nonplus analyzing financial statements, we should keep in mind that our analyses are to palliate understand the companys performance. Then ground on it, we predict the beside potential investing opportunity. And we volition examine these two companies correct analyzing: profitability ratios, assets utilization ratios, capitalization ratios, sustainable growth rate, and market ratios. II Financial ratios analysis A. Profitability analysis We outset compare revenues, ROS, Gross margin, run profit/sale, EBIT/sales, and EBITDA/sales for both(prenominal) companies. Exhibit 1-1 Comparison of sales growth judge Growth grade         2002         2001         2000         1999         1998 NIKE         8.13%         4.26%         5.49%         2.49%         -8.13% REEBOK         4.51%         4.

45%         -1.19%         -10.07%         -11.50% Nikes sales growth was negatively impacted by ane of its heroicgest domestic footwear distri scarceors, but its transnational business is booming. Obviously, the U.S. acrobatic footwear market is of import to Nike, and its working to find interchange distribution instead of the woolly Foot Locker space. go on at the same time, Nike is rivet on its huge multinational business and has been making big successes overseas. Reebok, on the other hand, is in the opposite position. As a smaller company, and one looking at on rebuilding its crack and returning to glory, its focusing a great deal of energy on its U.S. footwear Through... If you want to bullion in ones chips a entire essay, order it on our website: Orderessay

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