Discussion 8 Assignment Unit 8 Managerial Accounting PDF

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Discussion 8 Assignment Unit 8 Managerial AccountingDiscussion 8 Assignment Unit 8 Managerial AccountingDiscussion 8 Assignment Unit 8 Managerial AccountingDiscussion 8 Assignment Unit 8 Managerial Accountingv...

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Profitability: The gross profit ratio is a common instrument to analyze the operational effectiveness of the firm since it shows how many cents the business has after removing costs of goods sold for every dollar of net revenue (Thakur, n.d.). Gross Profit Ratio= (Gross profit/ Net sales) x 100= ($2.464B/$4.402B) x 100= 56% For the fiscal year 2021, Nike has a gross profit ratio of 56%. According to readyratios.com, the industry standards of a Sports and Athletics company is 33.5%, therefore, Nike has a good profitability. Liquidity: The Liquidity ratio, also known as the current ratio can be used to measure a company's short-term debt-paying ability (Seth, 2021). Current Ratio= Current Assets/ Current Liabilities= $4.185B/$1.627B= 2.41. According to readyratios.com, the industry standards of a Sports and Athletics company is 1.45, however, Nike has a current ratio of 2.41 for the year 2021. This number depicts how many dollars Nike has in assets for every dollar it owes in liabilities. Solvency: The debt-to-equity ratio is a long-term solvency ratio that reveals if a company's longterm financial strategies are healthy. The ratio indicates the relationship between external and internal equity (Gallo, 2015). Debt to Equity Ratio= Total Liabilities/ Total shareholder equity= $1.627B/$2.559B= 0.64. According to readyratios.com, the industry standards of a Sports and Athletics company is 2.01. Nike has a debt-to-equity ratio of 0.64 which is lower than the standards. For every $1 in shareholder equity, Nike has 64 cents in liabilities. Market-value ratio: The price-to-earnings ratio indicates how many times profits per share has been covered by the current market price of an ordinary share. Price-to-earnings-ratio= Share price/ Earnings per share= $385.68/$4.52= 85.33.

According to readyratios.com, the industry standards of a Sports and Athletics company is between 52 to 148. Nike has a market value ratio of 85.33 which is well within the standards. This value indicates how much money investors are ready to put into the company in order to make a dollar. It also shows investors whether the share's market price is appropriate or not (Fernando, 2021). Before investing in any firm, it is critical to evaluate all financial facts on the company's performance, including historical numbers and expert projections for the future. An investor should, in theory, compare a company's financial ratio to that of its competitors. For instance, how is the closest competitor faring in comparison to previous trends? And how do the future estimates stack up against Nike's? What are the effects of other factors on the market and Nike?

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The Net cash from financing activities is calculated by subtracting repayment of loans from the sum of new loans and issuance of common shares of stock: 50,000 + 5,000 – 45,000 = 10,000. The net change in cash was calculated subtracting

the net cash used in investing activities from the sum of net cash provided by operating and financing activities: 185,000 + 10,000 – 25,000 = 170,000. The cash balance at the end of the year was the sum of the cash balance and net cash: 170,000 + 30,000 = 200,0...