Compare the Financial Ratios Between Nike and Adidas Financial Report

The aim of this paper is to briefly cover a comparative analysis of two giant sportswear manufacturers in the world, Nike and Adidas. It should be noted that Nike and Adidas, both are undoubtedly the most successful and recognized sports brands.

Discussion

Upon simple analysis of the financial statements of Adidas and Nike, users can identify the prominent differences between the two annual statements. The major reason for these differences can be attributed to the fact that Nike complies with the Generally Accepted Accounting Principles (GAAP) accounting standards and practices, set forth by the New York Stock Exchange. On the other hand, Adidas is a registered public company on the Frankfurt stock exchange and hence complies with the Financial reporting standards (IFRS).The fiscal year truncates for Nike at May 31st and for Adidas the end of the year is marked as December 31st. Nike statement is in dollars and Adidas in euros.

Nike, Inc is an American multinational corporation that is engaged in the design, development, manufacturing, worldwide marketing of footwear, apparel, accessories and services. Nike is headquartered in Beaverton, Oregon and was founded in 1964 by Phil Knight and Bill Bowerman. includes Nike, Converse, Hurley and Jordans.

Mission statement: Bring innovation to every athlete* in the world, *if you have a body you are an athlete https://about.nike.com/

"Our consistent growth is fueled by innovation, which is why fiscal 2016 was such a breakthrough year for NIKE in everything we do,” said Mark Parker, President and CEO, NIKE, Inc. https://investors.nike.com/investors/news-events-and-reports/?toggle=earnings

Income statement

In 2016 Nike reported revenue of $32,376billion and along with other sources of income.

Type of Expenses would include cost of sales, demand creation expense, operating overhead expense. interest expense, income tax expense. In 2016 they declared a net income of 3.76 billion (11.61%).

Adidas AG is a multinational corporation, founded and the headquarter is  in Herzogenaurach, Germany, that designs and manufactures shoes, clothing and accessories. It is the largest sportswear manufacturer in Europe and the second largest in the world, after Nike. It was founded in July 1924 by Adi Dassler and Frank Dassler. It’s subsidiaries are Reebok, Runtastic, Taylormade, Mitchell &Ness, Solomon Group, Five ten Footwear, Ashworth, Adidas Originals, Adidas Korea, Adidas France, Adidas Canada, Adidas America, Adidas New Zealand, Adidas Singapore Pte Ltd, Matix.

Income statement

Adidas 2016 net sales were €19.291billion, royalty and commission income, other operating income, financial income, gain on discontinued operations. https://www.adidas-group.com/en/media/news-archive/press-releases/2017/adidas-record-sales-and-earnings-2016/

“2016 was an exceptional year for Adidas. We have improved the desirability of our brands and products around the globe. As a consequence, we were able to increase revenues strongly and achieve a record net income of more than € 1 billion for the first time in the history of our company” Kasper Rorsted, Adidas CEO.

"These results are proof positive that our strategy ‘Creating the New’ is paying off,” said Adidas CEO Kasper Rorsted. “Building on our 2016 performance, our momentum continues and we will again achieve strong top- and bottom-line improvements in 2017.”

Type of expenses would include cost of sales, other operating expenses; goodwill impairment loses, financial expenses, income tax expenses.

They reported a net income of €1,020billion(5.29%) in 2016.

Cash flow statement

Revenues

For the fiscal year 2017