Part A Interpret Nikes Statement of Cash Flows

Use Nikes Statement of Cash Flows to answer the following questions.

Did Nike have a net inflow or outflow of cash related to operations in the most recent fiscal year?
Did Nike have a net inflow or outflow of cash related to investing activities in the most recent fiscal year?
Did Nike have a net inflow or outflow of cash related to financing activities in the most recent fiscal year?
How much cash did Nike spend on PP&E purchases in the most recent fiscal year?
How much cash did Nike spend repurchasing its stock in the most recent fiscal year?
How much cash did Nike collect from customers in the most recent fiscal year?
How much cash did Nike pay for inventory in the most recent fiscal year?

Part B Calculate & Compare Nikes Ratios

Use Nikes financial statements to calculate the following ratios and summary measures for the two most recent fiscal years. Round your answers to the nearest hundredth. Where applicable, indicate whether the ratio was more favorable for the year ended May 31, 2023 or 2022.

Nikes stock price was $106 per share on May 31, 2023 and $121 on May 31, 2022.

		Year ended May 31, 2023		Year ended May 31, 2022		Is the Ratio more favorable in the year ended May 31, 2023 or 2022?
QUICK RATIO
GROSS MARGIN %
PROFIT MARGIN %
EARNINGS PER SHARE
DEBT-TO-EQUITY RATIO						n/a
PE RATIO						n/a
EBITDA

\begin{tabular}{|c|c|c|c|} \hline OPERATING ACTIVITIES & \begin{tabular}{r} Year ended \\ May 31, \\ 2023 \\ \end{tabular} & \begin{tabular}{r} Year ended \\ May 31, \\ 2022 \\ \end{tabular} & \begin{tabular}{r} Year ended \\ May 31, \\ 2021 \\ \end{tabular} \\ \hline Net Income & $5,070 & $6,046 & $5,727 \\ \hline \multicolumn{4}{|l|}{ Adjustments to reconcile net income to cash from operations: } \\ \hline Depreciation expense & 703 & 717 & 744 \\ \hline Amortization expense & 156 & 123 & 53 \\ \hline Stock-based compensation expense & 755 & 638 & 611 \\ \hline Other, net & (330) & (676) & (523) \\ \hline \multicolumn{4}{|l|}{ Changes in operating assets and liabilities: } \\ \hline Accounts receivable & 536 & (204) & (1,606) \\ \hline Inventory & (34) & (1,566) & 507 \\ \hline Prepaid expenses and other assets & (790) & (1,255) & (182) \\ \hline Accounts payable & (496) & 522 & 604 \\ \hline Other accrued expenses and liabilities & 271 & 843 & 722 \\ \hline Net cash provided by operating activities & 5,841 & 5,188 & 6,657 \\ \hline \multicolumn{4}{|l|}{ INVESTING ACTIVITIES } \\ \hline Purchases of short-term investments & (6,059) & (12,913) & (9,961) \\ \hline Sale and maturities of short-term investments & 7,540 & 12,166 & 6,685 \\ \hline Purchases of property, plant and equipment & (969) & (758) & (695) \\ \hline Other, net & 52 & (19) & 171 \\ \hline Net cash used in investing activities & 564 & (1,524) & (3,800) \\ \hline \multicolumn{4}{|l|}{ FINANCING ACTIVITIES } \\ \hline Repayment of borrowings & (500) & - & (197) \\ \hline Proceeds from employee stock purchases & 651 & 1,151 & 1,172 \\ \hline Repurchases of common stock & (5,509) & (3,994) & (608) \\ \hline Dividends paid & (2,012) & (1,837) & (1,638) \\ \hline Other, net & (77) & (156) & (188) \\ \hline Net cash provided by financing activities & (7,447) & (4,836) & (1,459) \\ \hline Effect of exchange rate changes & (91) & (143) & 143 \\ \hline NET INCREASE IN CASH AND CASH EQUIVALENTS & (1,133) & (1,315) & 1,541 \\ \hline CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD & 8,574 & 9,889 & 8,348 \\ \hline CASH AND CASH EQUIVALENTS, END OF PERIOD & $7,441 & $8,574 & $9,889 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{\begin{tabular}{l} Consolidated Income Statements \\ In millions, except per share amounts \end{tabular}} \\ \hline & \begin{tabular}{r} Year ended \\ May 31, 2023 \\ \end{tabular} & \begin{tabular}{r} Year ended \\ May 31, 2022 \\ \end{tabular} & \begin{tabular}{r} Year ended \\ May 31, 2021 \\ \end{tabular} \\ \hline Net sales & $51,217 & $46,710 & $44,538 \\ \hline Cost of goods sold & 28,925 & 25,231 & 24,576 \\ \hline Gross margin & 22,292 & 21,479 & 19,962 \\ \hline Demand creation expense & 4,060 & 3,850 & 3,114 \\ \hline Other operating expenses & 12,317 & 10,954 & 9,911 \\ \hline Operating income & 16,377 & 14,804 & 13,025 \\ \hline Interest expense & 291 & 299 & 296 \\ \hline Other income, net & 577 & 275 & 20 \\ \hline Income before income taxes & 6,201 & 6,651 & 6,661 \\ \hline Income tax expense & 1,131 & 605 & 934 \\ \hline Net income & $5,070 & $6,046 & $5,727 \\ \hline Basic earnings per share & $3.27 & $3.83 & $3.64 \\ \hline \multicolumn{4}{|c|}{ Excerpt from Notes to Consolidated Financial Statements } \\ \hline \multicolumn{4}{|c|}{ Note 1. Summary of Significant Accounting Policies } \\ \hline \multicolumn{4}{|c|}{\begin{tabular}{l} Description of Business. NIKE, Inc. is a worldwide leader in the design, development and worldwide \\ marketing and selling of athletic footwear, apparel, equipment, accessories and services. NIKE, Inc. \\ portfolio brands include the NIKE Brand, Jordan Brand and Converse. The NIKE Brand is focused on \\ performance athletic footwear, apparel, equipment, accessories and services across Men's, Women's and \\ Kids', amplified with sport-inspired lifestyle products carrying the Swoosh trademark, as well as other \\ NIKE Brand trademarks. The Jordan Brand is focused on athletic and casual footwear, apparel and \\ accessories using the Jumpman trademark. Converse designs, distributes, licenses and sells casual \\ sneakers, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron and \\ Jack Purcell trademarks. In some markets outside the U.S., these trademarks are licensed to third parties \\ who design, distribute, market and sell similar products. \end{tabular}} \\ \hline \end{tabular} FIN STMTS FOR WEEK 9 ASSIGNMENTNIKE INC. \begin{tabular}{|c|c|c|c|} \hline OPERATING ACTIVITIES & \begin{tabular}{r} Year ended \\ May 31, \\ 2023 \\ \end{tabular} & \begin{tabular}{r} Year ended \\ May 31, \\ 2022 \\ \end{tabular} & \begin{tabular}{r} Year ended \\ May 31, \\ 2021 \\ \end{tabular} \\ \hline Net Income & $5,070 & $6,046 & $5,727 \\ \hline \multicolumn{4}{|l|}{ Adjustments to reconcile net income to cash from operations: } \\ \hline Depreciation expense & 703 & 717 & 744 \\ \hline Amortization expense & 156 & 123 & 53 \\ \hline Stock-based compensation expense & 755 & 638 & 611 \\ \hline Other, net & (330) & (676) & (523) \\ \hline \multicolumn{4}{|l|}{ Changes in operating assets and liabilities: } \\ \hline Accounts receivable & 536 & (204) & (1,606) \\ \hline Inventory & (34) & (1,566) & 507 \\ \hline Prepaid expenses and other assets & (790) & (1,255) & (182) \\ \hline Accounts payable & (496) & 522 & 604 \\ \hline Other accrued expenses and liabilities & 271 & 843 & 722 \\ \hline Net cash provided by operating activities & 5,841 & 5,188 & 6,657 \\ \hline \multicolumn{4}{|l|}{ INVESTING ACTIVITIES } \\ \hline Purchases of short-term investments & (6,059) & (12,913) & (9,961) \\ \hline Sale and maturities of short-term investments & 7,540 & 12,166 & 6,685 \\ \hline Purchases of property, plant and equipment & (969) & (758) & (695) \\ \hline Other, net & 52 & (19) & 171 \\ \hline Net cash used in investing activities & 564 & (1,524) & (3,800) \\ \hline \multicolumn{4}{|l|}{ FINANCING ACTIVITIES } \\ \hline Repayment of borrowings & (500) & - & (197) \\ \hline Proceeds from employee stock purchases & 651 & 1,151 & 1,172 \\ \hline Repurchases of common stock & (5,509) & (3,994) & (608) \\ \hline Dividends paid & (2,012) & (1,837) & (1,638) \\ \hline Other, net & (77) & (156) & (188) \\ \hline Net cash provided by financing activities & (7,447) & (4,836) & (1,459) \\ \hline Effect of exchange rate changes & (91) & (143) & 143 \\ \hline NET INCREASE IN CASH AND CASH EQUIVALENTS & (1,133) & (1,315) & 1,541 \\ \hline CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD & 8,574 & 9,889 & 8,348 \\ \hline CASH AND CASH EQUIVALENTS, END OF PERIOD & $7,441 & $8,574 & $9,889 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{\begin{tabular}{l} Consolidated Income Statements \\ In millions, except per share amounts \end{tabular}} \\ \hline & \begin{tabular}{r} Year ended \\ May 31, 2023 \\ \end{tabular} & \begin{tabular}{r} Year ended \\ May 31, 2022 \\ \end{tabular} & \begin{tabular}{r} Year ended \\ May 31, 2021 \\ \end{tabular} \\ \hline Net sales & $51,217 & $46,710 & $44,538 \\ \hline Cost of goods sold & 28,925 & 25,231 & 24,576 \\ \hline Gross margin & 22,292 & 21,479 & 19,962 \\ \hline Demand creation expense & 4,060 & 3,850 & 3,114 \\ \hline Other operating expenses & 12,317 & 10,954 & 9,911 \\ \hline Operating income & 16,377 & 14,804 & 13,025 \\ \hline Interest expense & 291 & 299 & 296 \\ \hline Other income, net & 577 & 275 & 20 \\ \hline Income before income taxes & 6,201 & 6,651 & 6,661 \\ \hline Income tax expense & 1,131 & 605 & 934 \\ \hline Net income & $5,070 & $6,046 & $5,727 \\ \hline Basic earnings per share & $3.27 & $3.83 & $3.64 \\ \hline \multicolumn{4}{|c|}{ Excerpt from Notes to Consolidated Financial Statements } \\ \hline \multicolumn{4}{|c|}{ Note 1. Summary of Significant Accounting Policies } \\ \hline \multicolumn{4}{|c|}{\begin{tabular}{l} Description of Business. NIKE, Inc. is a worldwide leader in the design, development and worldwide \\ marketing and selling of athletic footwear, apparel, equipment, accessories and services. NIKE, Inc. \\ portfolio brands include the NIKE Brand, Jordan Brand and Converse. The NIKE Brand is focused on \\ performance athletic footwear, apparel, equipment, accessories and services across Men's, Women's and \\ Kids', amplified with sport-inspired lifestyle products carrying the Swoosh trademark, as well as other \\ NIKE Brand trademarks. The Jordan Brand is focused on athletic and casual footwear, apparel and \\ accessories using the Jumpman trademark. Converse designs, distributes, licenses and sells casual \\ sneakers, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron and \\ Jack Purcell trademarks. In some markets outside the U.S., these trademarks are licensed to third parties \\ who design, distribute, market and sell similar products. \end{tabular}} \\ \hline \end{tabular} FIN STMTS FOR WEEK 9 ASSIGNMENTNIKE INC