Interpretation assignment Essay Example | Topics and Well Written Essays - 1500 words

Interpretation assignment - Essay ExampleThese financial metrics hint to the safety for the creditors and long- line loaners of the party hence a low proportion becomes a point of precaution for the stakeholders. The improvement in the accepted ratio as well as the rapidly ratio indicates that the club is now in a better position to pay its term obligations. This improvement is extensively due to increase in the current assets especially cash and equivalents, and short term investments. Nike held $3.47 in 2013 as compared to $3.05 in 2012 for every $1 of short term liabilities as shown in appendix. Likewise, the companys current ratio is almost at par with the industry average. Similarly, the company has seen a drastic improvement in the quick ratio in 2013 as compared to 2012. Nike held $2.31 in 2013 as compared to $1.93 in 2012 for every $1 of short term liabilities as shown in appendix. Compared to the industry average, the company leads the market with a high ratio. The i mprovement is again associated to the large investments in cash as well as marketable securities. The inventories, prepaid and deferred taxes only saw tenuous outgrowths. Therefore, the liquidity analysis shows that Nike is in a better position to handle any unexpected current liabilities and contingencies in 2013 as compared to 2012, and compared to its industry rivals. PROFITABILITY ANALYSIS Nikes revenues grew by 11% in 2013. ... The companys gross gross profit meliorate by 10 basis points in 2013 as shown in appendix however, this improvement was due to higher net selling prices rather than the efficiency and effectiveness of the prudence and assets. At the same time, the company saw an increase in the labor costs associated with Nike product do which decreased the gross margins. Nike contributed 43.6c in 2013 and 43.5c in 2012 to the gross profit for every $1 sale do by the company as shown in appendix. Compared to the industry average, Nike has a better margin and is on e of leadership of the industry. The net margin measures the ability of the company to control its indirect expenses associated with the companys working. Nike saw an improved net margin in 2013 when it increased by 30 basis points as shown in appendix. However, the increment could have been much higher but the company was unable to manage its increments in costs. The selling and administrative expenses increased by 10% in 2013 due to increase in personnel costs and advertizing expense during the Olympics. Nike contributed 9.8c in 2013 as compared to 9.5c in 2012 to the net profit for every $1 sale that is make by the company as shown in appendix. Compared to industry average, the company has a moderate net margin and needs to improve in the coming years. However, the quality of the income was not favorable in 2013. The increment was principally due to increase in the net selling prices of the Nike products all over the world. The return on equity, an grand metric from an investo rs point of view, measures the return earned by the owners of the company. The companys return on equity increased by 90 basis points in 2013 due to an increase in the