Nike vs. Reebok

Nike vs. Reebok

General Information about the Industry and Companies

I selected to compare two companies; Nike and its competitor, Rebook for my course subject from apparel and sports footwear industry. This business is involved in the development, design and the global marketing and selling of apparel, footwear, accessories, equipment and services. The United States is considered as one of the biggest markets for sports footwear and apparel in the world. In 2008 and 2009, production of athletic apparel and footwear of US indicates a negative growth. 2010, the growth of the industry shows a positive CAGR of 0.82%. By 2015, it is anticipated that the global market of footwear is going to reach at $195 billion. The volume of sales has been exceeding 13 billion by 2013 (Wang, 2002).

Nike is a multinational corporation based on America and it is involved in the development, design and worldwide selling and marketing of its athletic footwear, apparel, accessories and other related services. Nike headquartered near Beaverton, located in Oregon.

Reebok is a global manufacturer of athletic clothing, shoes and accessories. Reebok is a subsidiary of the Adidas i.e. the Germany Company. Reebok headquarters is located in Canton, Massachusetts (Lewellen, 2004).

Spreadsheets

Nike Inc.

Few adjustments were made in order to fit the restrictions that are about the Excel document under the Consolidated Statement of Operations and the Consolidated Balance Sheet. For an efficient comparison of two athletic organizations, these adjustments are necessary. Extra attention was provided so that the adjustments showed consistency and did not change the balance of accounts.

The information and data were obtained from the 10-k form and based on five years (i.e. from 2008 to 2012).

I included all revenues and earnings for net sales, except the investment which was highlighted under the other income.

Amortization and depreciation is considered as a primary expense. The reason is that the equipment and property cost is assumed as a fundamental cost.

The common equity is included as total equity of shareholders, and there was no other preferred stock i.e. outstanding or issued.

Investors should see this stock as a great opportunity as the firm operates in a vibrant sector and holds good opportunity form their perspective. The stock's price is escalating, and price to earnings show that investors have confidence in this stock (Ioannidis et al., 2003).

Reebok Int. Ltd.

There is the following summary of the groupings that were analyzed. An effort was made for researching each and every item on the financial statements in order to find the most appropriate situation. However, some were grouped based on generalizations due to the complex nature and limited financial statements.

Net Realized Capital Loss and Net Investment Income accounts were included under the accounts of other operating income (Ma et al., 2010).

Accrued investment income received under income tax receivables and securities loan agreements were all involved in the account of other current assets.

Relevant Ratios and Discussion of Findings of Horizontal Analysis

Financial ratios serve as tools which are used to evaluate the strengths and weaknesses in terms of its ...