Nike, Inc. and Adidas-Salomon are ranked as the first and second most dominant companies in the footware and sporting apparel and equipment industry. This paper will examine their cash flows, based on the most recent financial data from their web sites. The assets section shows the amount of cash they have earned, and the liabilities and equity list their debts and the amount they owe.
The most recent operating financial information from Nike are from the financial year ending February 28, 2005 (www.nikebiz.com). The statement lists current assets as $6,198,700,000 dollars, of which $1,222,500,000 are cash and equivalents, and $418,300,000 are from short-term investments. They have fulfilled but not been paid for orders of goods amounting to $2,304,900,000. They have $1,727,000,000 tied up in inventory; there is $170,500,000 in deferred taxes and $355,500,000 in prepaid expenses and other current assets. Adding fixed assets, depreciation, identifiable intangibles and other assets, their total assets come to $8,652,100,000.
On the liability side, they list only a relatively small amount - $6,400,000 -- under the category of current long term debt. In the category of financing, they owe banks $101,300,000 and suppliers `nd contractors $684,200,000 (accounts payable). Their accrued liabilities are $1,091,400,000 and they owe income tax amounting to $182,700,000. Their total current liabilities come to $2,066,000,000.
Nike's long-term debt (not-current) is $691,400,000 and their deferred income taxes and other liabilities amount to $467,300,000. Finally, their preferred stock is only $300,000,while their much larger amount of common equity comes to $5,427,000,000. According to their accountants, the amount of their current assets matches their total liability and equity: $8,652,100,000.
Adidas-Salomon explains that "working capital is the Company's short-term disposable capital used to finance the day-to-day
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