Dick’s Sporting Goods is a very popular chain sporting goods retailer, but when looking to invest or when attempting to enter the same competitive market it is not enough just to analyze the superficial data. One might look at Dick’s and say with 610 locations across the U.S. they appear to be stiff competition in the sporting retail industry, but without looking at their financial records as well as the records of their competition one cannot effectively determine their stability in the market. Nike, though significantly bigger as far as their overall operations go, remains a good company comparison because not only do they make their money in the same sporting retail industry but they also have similar brand awareness in the USA. By looking …show more content…
and not an overseas industry. But when considering its size Dick’s working capital of $581,071,000 shows short-term creditors much more. Dick’s Sporting Goods has a little over half a million dollars of working capital meaning they should have plenty of short-term assets to cover any short-term debts, but working capital does not show the full story. Though having over half a million dollars in working capital their current ratio is only 1.41 which compared to Nike’s 2.93 is fairly low Dick’s only has half the ability to pay off its current liabilities that Nike does. The current ratio is much more reliable both with indicating liquidity and with comparing companies across different levels of financial standing. Dick’s current ratio is significantly lower when compared to Nike’s it is only slightly lower than the industry average which sits at 1.59. Because of this lower than average current ratio many short-term creditors would be hesitant to lend to Dick’s Sporting Goods for fear of them being unable to pay them back. Though Dick’s falls only slightly below average when it comes to current ratios that is not the case for quick ratios. Dick’s quick ratio comes equates to .12 mean while industry average is .87 and Nike’s sits at 1.80. This means incredibly low quick ratio means that most of …show more content…
The first two ratios that help analyze a company’s profitability are asset turnover, how effectively a company uses its assets, and return on total assets, profitability of total assets regardless of how they are financed. For Dick’s Sporting Goods asset turnover is 2.18 and return on total assets is 8.41%; for comparison Nike’s assets turnover is 1.56 and return on total assets is 19.58%. The reason why Dick’s can have a better asset turnover but a drastically worse return on total assets is because asset turnover excludes long-term investments but return on total assets includes them. This means that Nike has many more profitable long-term investments than Dick’s. For investors or potential investors, it is important to measure the rate of income earned on the stockholder’s investments and the next two ratios address that. The first, return on stockholders’ equity, addresses the income earned rate for all stockholders’ equity while the second, return on common stockholders’ equity, focuses specifically on the profits earned by the common stockholders. For Dick’s the first ratio came out to 17.14% while the second was only 16.44%. For Nike the first ratio is 34.04% and the second is only 15.38%. This would mean that on average common stockholder’s only make a slightly lower percentage on their
Their current ratio improved from 1.59 to 2.44 which shows the ability to cover current liabilities has improved. Massachusetts Stove Company strategically made decisions to not only increase their current assets quickly but also managed their liabilities to keep them from growing out of control. This means that the company could cover current liabilities at any time relatively easily with their cash, receivables, or other current assets. In terms of the market, Massachusetts Stove Company does have the demand of 220,000 active prospects they could try to sell stoves too if a dire need arose for quick cash. Management even brought their quick ratio to 1.08.
Introduction Sitting down and writing this essay, had me perplexed, I didn’t know where to begin and then I said ‘JUST DO IT’. A term that has many meanings such as motivation, energize, get in shape and work hard, and the first thing that comes to one’s mind is “Just Do It” which is what Nike stands for. The brand Nike is one of the most known brands for their slogan “Just Do It” which was coined in the year 1988. It is successfully known to all parts of the world with famous athletes associated with them to promote their products. Nike as a brand is such that is seen everywhere through advertisements or their reliable products they produce.
Introduction The main objective of this particular case study is to assist Victor Dubinski, the current CEO of Blaine Kitchenware, decide whether or not repurchasing shares and changing the firm’s capital structure in favor of more debt could actually be benefit the company and its shareholders. Blaine Kitchenware is a small cap, public company who focuses on selling various different residential kitchen appliances. Up until this point, the company has only used cash and equity financing to acquire independent kitchen appliance manufacturers, and expand into foreign markets abroad. Given their excess cash and lack of debt, Blaine Kitchenware is considered to be “over-liquid and under-leveraged” (Luehrman & Heilprin, 2009).
When it comes to athletic apparel, the first company people think of is either Nike or Adidas. Why is this so? Both Nike and Adidas have done an impressive job in marketing their products, with popular spokesperson like Kobe Bryant or Derrick Rose. Nike’s success is attributed to its products contributing to the success of the athletes who purchase them. Nike and Adidas seemed as though they had control on the athletic apparel oligopoly, but recently, Under Armour has become a serious competitor to the two companies.
The DuPont method breaks down ROE into its component parts, helping investors understand if returns are driven by (1) high profit margins, (2) high asset turnover, (3) high debt, or some combination of the three. Net operating assets = total assets – (total liabilities – debt) Review of report on Du pont analysis submitted by STEVEN S
2.0 Competitor Analysis The industry that Under Armour is involved with is extremely competitive, with competing against big names such as Nike or Adidas. Although it’s hard at the beginning, but customers want to have the highest quality apparel therefore they turn to Under Armour. Under Armour stays in the competition by having high quality products, and also by signing endorsements deals with major athletes (Owusu, 2017). By having major athletes represent Under Armour, means the company will be bringing in "big money" because they will bring up the brand’s popularity. The major competitors in this industry are of course inclusive of big names such as Adidas, Nike, Dick’s Sporting Goods and Puma.
Nike has sustained positive revenue in a worldwide market focusing on a healthy and active lifestyle. For the past 3 years Nike has gained a gross profit ratio of 8.73% in fiscal of 2013, 10.28% in fiscal of 2012, and 8.28% in 2011 . Thus showing the financial power Nike has, well the firm holds a net income of 2.5 billion in the fiscal year of 2013. Nike’s largest product category is footwear, representing over 55% of the companies revenue. Nike uses their financial resources ability to obtain large advertising plots, whether it is a commercial on television, advertisements on the Internet, or product promotion in athletic facilities.
Company Description Nike believes diversity and inclusion drives innovation that lead to a competitive advantage. Nike has a broad base of suppliers that actively and significantly support their business requirements. Nike’s Global Procurement team manages the procurement process, including selecting and contracting with the right suppliers for the right goods and services. They have also begun to reduce Nike 's footprint and lessen their impact.
Due to this reason Nike is now a world wide brand used by each and every people in different parts of the
Executive Summary: Under Armour is a company which was launched by former University of Maryland football player Kevin Plank. When he first started his business, it was named KP Sports, it is now known as Under Armour. The company started very small and operations were held from the basement of the founder's grandmother's house. However, the company soon expanded to have a remarkable market share in the sports apparel industry.
In the assignment, it will discuss the sports brand Nike which specifically focuses in Chinese market. There are three main content areas in this assignment. The first part is a macro environmental analysis; the next part is the target customer profile; the last part is the analysis of marketing strategies. Macro Environmental Analysis: Nike is a very well-known market leader. It is an international brand, their products are selling in the worldwide including China.
As each of these companies begin to diversify from their initial product and target market competition intensifies between. For example Nike and Adidas are in direct competition with each other as both provide branded sports gear but each are beginning to move into producing less sport orientated clothing
This is due to Nike gets its merchandise generally from foreign manufacturers. To operate profitably, Nike need to get good value on products and supplies and, in turn, offer good value to its customers with accessible solutions. Publics: Many colleges and universities, especially anti-globalization groups as well as several anti-sweatshop groups
Probable factors that could affect Nike’s business judgements are a range of demographic, social, economic and political. A few have already started to transpire, though others are purely likelihoods. External factors affecting this mix is one of the most common, technology. Before Nike releases its brand new product line to the market, it’s always prepared to authorize that whether or not there has been any sort of major advances from the other competitors that would tracker its launch. Thus they must time this carefully, as other competition may demand to shadow its release with their marketing
Analyse Nike balance cost and safety in Bangladesh from the perspective of management control systems and risk management. Introduction Poor working conditions have been present for centuries, especially in third world countries. Often times little or nothing is done unless a tragedy occurs to persuade the public to rally for worker rights. It wasn't that long ago that Nike was being shamed in public for its labor practices to the point where it badly tarnished the company's image and hurt sales. The recent factory collapse in Bangladesh was a reminder that even though Nike managed to turn around its image, large parts of the industry still haven't changed much at all.