Business Financial Comparison.
Business Financial Comparison: Different ratios in financial statements have varying implications on the progress of an organization. Investors, employees, the government, suppliers and creditors are involved in the financial status of the organization as necessitated by their interests on the organization.
The ratios are mostly derived from the balance sheet and the profit and loss accounts of an organization. The current study analyzes financial status of Nike and Sketcher, and interprets the ratios’ meaning to the stakeholders.
Both organizations are in the same industry, and involve in production of sportswear (Reuters, 2013), and Nike Repository (n.d.) states that the two organizations are great competitors.
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in order to be use in growth and expansion of the organization’s operations. Nike has a ratio of 28% in 2012 and 26.79% in 2011. However, there are no dividends per share in Sketchers for the two years. These values mean that Nike pays a larger portion of its earnings to the shareholders as compared to Sketchers, which gives no dividends.
Sketcher and Nike have different values in the accounting ratios. It is generally identifie that both organizations are promising in terms of the returns expecte from investing in them. Both are also sustainable.
However, there are some variations, such as having Nike experiencing a better operational performance while Sketcher is more liquid. Nike, however, has more profitability and liquidity ratios that are higher than Sketcher’s, indicating that it could be more profitable. Therefore, it is more advisable to invest in Nike.
Faq (2013). Sketchers USA Inc. 10-K/A.
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