Nike Case Analysis - 930 Words

NIKE ANALYSIS The Weight Average Cost of Capital (WACC) is the firm’s cost of capital. We can think of WACC as an average representing the expected return on all of the companies’ securities. It is an extremely important number for both corporations and usually financials advisors. Corporations use this number as a minimum for evaluating their capital projects or investments. So if for example the WACC of a firm is 10% and the return on investing in a project is 4.5%, then the company would not invest in that particular project. The company in this particular scenario would at least have to get a return of 10% or more to invest in a project. I agree with Johanna Cohen’s estimates as she did the calculations right because I went over†¦show more content†¦The price earnings ratio is the one I liked the most. It shows the measure of the price paid for a share of Nike stock relative to the net income earned by the company. I would recommend that the Nike sto ck should be expressed as a hold because its net income is quite small compared to the revenue it earns. Nike’s cost of goods sold is extremely high, even when they make most of their products overseas in third world countries. Their revenue growth has also drastically slowed down only from five years ago when they had a growth rate of 35.9% in 1995 and 42% in 1996. The past four years Nike had an average growth rate of revenue at 0.975%, which is less than 1%. For a company the size of Nike and the previous large growth it had, something might have been wrong. Their net income,has also as a percentage gone down. The Nike stock should be considered a hold for investors who already own theShow MoreRelatedNike Case Analysis794 Words   |  4 PagesNIKE CASE STUDY ANALYSIS Q: What characteristics about Nike contributed to their troubles with i2 becoming nothing more than a speed bump? 1. i2’s predictive demand application and its supply chain planner used different business rules and stored data in different formats, making it difficult to integrate the two applications. The i2 software needed to be so heavily customized to operate with Nike’s legacy systems that it took as much as a minute for a single entry to be recordedRead MoreNike Case Analysis4952 Words   |  20 PagesBRAND MANAGMENT Nike: Building a Global Brand Case analysis Ahmed Coucha 800090353 6/29/2011 Dr. Ibrahim Hegazy 2 How would you characterize Nike’s brand image and sources of brand equity in the U.S? 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