CORPORATE FINANCEMG/670 Dr. YungPresented by Derri Taylor Thomas

BEFORE THERE WAS THE SWOOSH…

BEFORE THERE WAS NIKE…

THERE TWO MEN WITH A VISION

Bill Bowerman, respected track and field coach at University of OregonPhil Knight , talented middle-distance runner with MBA in finance from Standford University

1964- A HAND SHAKE AND PLEDGE OF $500 EACH FORMED BLUE RIBBON SPORTS

Bill Bowerman seeked ways to give his athletes competitive advantage:

Hydration drinks Different track surfaces Innovations in running shoes

Phil Knight wrote proposal for quality running shoe to Japaneses manufacturers, but calls went unanswered, but he didn’t give up

He madw calls to Onitsuka Co. in Kobe Japan and convince them to make him a distributor for Tiger shoes in the U.S

First attempt to sell was to Bill Bowerman who offered a partnership

EARLY INNOVATIONSWhile Knight sold shoes out of his Plymouth, Bowerman ripped apart Tiger shoes, to find ways to make them lighter and better. His creations were tested by University of Oregon runners.

1970-1979 NIKE’S BIRTHJeff Johnson, a runner, became Blue Ribbon’s first employee in 1965. He created and conjured up the name Nike in 1971.The new Nike line of footwear with the Swoosh brand mark debut in 1972

KNIGHT OFTEN SAID, “PRE WAS THE SOUL OF NIKE”

1972: Nike Endorses Steve Prefontine who track over one-mile distance and gained national exposure.

He would become an ambassador for Blue Ribbon Sports and Nike, signing and sending Nike shoes to runners with notes of encouragement

Died at age of 24 in 1975

TODAY NIKE CONTINUES TO CREATE SUPERIOR PRODUCTS FOR OUR CUSTOMERS

Direct Competitor Comparison

NKE ADDYY PVT1 PVT2 IndustryMarket Cap: 68.35B 25.30B N/A N/A N/AEmployees: 48,000 42,540 N/A 109,351 N/A

Qtrly Rev Growth (yoy): 0.08 -0.07 N/A N/A 0

Revenue (ttm): 25.81B 18.62B N/A 4.32B1 N/A

Gross Margin (ttm): 0.44 0.49 N/A N/A 0

EBITDA (ttm): 4.03B 1.78B N/A N/A N/A

Operating Margin (ttm): 0.14 0.08 N/A N/A 0

Net Income (ttm): 2.66B 678.42M N/A 92.80M1 N/A

EPS (ttm): 2.96 1.62 N/A N/A N/AP/E (ttm): 25.93 37.3 N/A N/A N/A

GO

ANALYSIS OF BALANCE SHEET

Total Assets = $17,584,000 ( Increased asset indicate company has growth2013 ROE = Net Income/stockholder’s Equity= 2,485,000/11,156,000= 22%

http://finance.yahoo.com/q/bs?s=NKE+Balance+Sheet&annual

HOLDING PERIOD RETURN: RETURN ON ASSET OVER SPECIFIC PERIOD OF TIME OR HOLDING

RCA =

CapitalAppreciationInitialPrice

P1 -P0

P0

PP0

78.92-77.81/78.92= 1.41 From Sept I earned 1.41% on

investmemt

SO IF I INVEST WHAT’S THE RISK???Risk is determined by the Beta:If the Beta is 1 that means the stock sways with the market movementOver 1.5 or more the risk is even higherBelow 1, no risk =Nike(.55)

Nike is top in industry since 1965Risk are low if investing

Assets increased 85% from 2011 to 2013 Guaranteed return

TELL ME AGAIN, WHY INVEST?

JUST DO IT

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