Intrinsic value of Nike Cl B - NKE

Previous Close

$85.55

  Intrinsic Value

$60.89

stock screener

  Rating & Target

sell

-29%

Previous close

$85.55

 
Intrinsic value

$60.89

 
Up/down potential

-29%

 
Rating

sell

We calculate the intrinsic value of NKE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 109.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  12.80
  12.02
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.78
  6.61
  6.45
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
Revenue, $m
  41,056
  45,991
  51,196
  56,667
  62,400
  68,394
  74,649
  81,166
  87,950
  95,005
  102,339
  109,961
  117,882
  126,113
  134,669
  143,565
  152,819
  162,447
  172,472
  182,912
  193,793
  205,136
  216,969
  229,317
  242,210
  255,676
  269,749
  284,460
  299,844
  315,938
Variable operating expenses, $m
  35,384
  39,632
  44,113
  48,822
  53,758
  58,917
  64,301
  69,911
  75,751
  81,824
  88,093
  94,654
  101,472
  108,557
  115,922
  123,580
  131,545
  139,834
  148,462
  157,450
  166,815
  176,580
  186,765
  197,395
  208,493
  220,085
  232,198
  244,861
  258,104
  271,957
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  35,384
  39,632
  44,113
  48,822
  53,758
  58,917
  64,301
  69,911
  75,751
  81,824
  88,093
  94,654
  101,472
  108,557
  115,922
  123,580
  131,545
  139,834
  148,462
  157,450
  166,815
  176,580
  186,765
  197,395
  208,493
  220,085
  232,198
  244,861
  258,104
  271,957
Operating income, $m
  5,671
  6,358
  7,083
  7,844
  8,643
  9,477
  10,348
  11,255
  12,199
  13,181
  14,246
  15,307
  16,410
  17,556
  18,747
  19,985
  21,273
  22,614
  24,009
  25,463
  26,977
  28,556
  30,203
  31,922
  33,717
  35,592
  37,551
  39,599
  41,740
  43,980
EBITDA, $m
  6,523
  7,307
  8,134
  9,003
  9,914
  10,867
  11,861
  12,896
  13,974
  15,095
  16,260
  17,471
  18,729
  20,037
  21,397
  22,810
  24,280
  25,810
  27,403
  29,062
  30,790
  32,593
  34,473
  36,435
  38,483
  40,623
  42,859
  45,196
  47,640
  50,197
Interest expense (income), $m
  98
  206
  294
  387
  486
  589
  697
  811
  929
  1,052
  1,180
  1,313
  1,452
  1,596
  1,746
  1,901
  2,063
  2,231
  2,406
  2,588
  2,777
  2,974
  3,180
  3,394
  3,618
  3,851
  4,094
  4,349
  4,615
  4,893
  5,183
Earnings before tax, $m
  5,466
  6,064
  6,695
  7,359
  8,053
  8,780
  9,537
  10,326
  11,147
  12,001
  12,933
  13,855
  14,814
  15,810
  16,846
  17,922
  19,042
  20,208
  21,422
  22,686
  24,003
  25,377
  26,809
  28,305
  29,866
  31,497
  33,202
  34,984
  36,848
  38,797
Tax expense, $m
  1,476
  1,637
  1,808
  1,987
  2,174
  2,370
  2,575
  2,788
  3,010
  3,240
  3,492
  3,741
  4,000
  4,269
  4,548
  4,839
  5,141
  5,456
  5,784
  6,125
  6,481
  6,852
  7,239
  7,642
  8,064
  8,504
  8,965
  9,446
  9,949
  10,475
Net income, $m
  3,990
  4,427
  4,888
  5,372
  5,879
  6,409
  6,962
  7,538
  8,138
  8,761
  9,441
  10,114
  10,814
  11,541
  12,297
  13,083
  13,901
  14,752
  15,638
  16,561
  17,522
  18,525
  19,571
  20,663
  21,802
  22,993
  24,237
  25,538
  26,899
  28,322

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  25,422
  28,477
  31,700
  35,088
  38,638
  42,349
  46,222
  50,258
  54,458
  58,827
  63,368
  68,088
  72,992
  78,089
  83,386
  88,895
  94,624
  100,587
  106,794
  113,258
  119,995
  127,019
  134,346
  141,992
  149,975
  158,314
  167,027
  176,136
  185,662
  195,627
Adjusted assets (=assets-cash), $m
  25,422
  28,477
  31,700
  35,088
  38,638
  42,349
  46,222
  50,258
  54,458
  58,827
  63,368
  68,088
  72,992
  78,089
  83,386
  88,895
  94,624
  100,587
  106,794
  113,258
  119,995
  127,019
  134,346
  141,992
  149,975
  158,314
  167,027
  176,136
  185,662
  195,627
Revenue / Adjusted assets
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
  1.615
Average production assets, $m
  5,009
  5,611
  6,246
  6,913
  7,613
  8,344
  9,107
  9,902
  10,730
  11,591
  12,485
  13,415
  14,382
  15,386
  16,430
  17,515
  18,644
  19,819
  21,042
  22,315
  23,643
  25,027
  26,470
  27,977
  29,550
  31,193
  32,909
  34,704
  36,581
  38,544
Working capital, $m
  4,721
  5,289
  5,888
  6,517
  7,176
  7,865
  8,585
  9,334
  10,114
  10,926
  11,769
  12,646
  13,556
  14,503
  15,487
  16,510
  17,574
  18,681
  19,834
  21,035
  22,286
  23,591
  24,951
  26,371
  27,854
  29,403
  31,021
  32,713
  34,482
  36,333
Total debt, $m
  5,449
  7,176
  8,997
  10,911
  12,916
  15,013
  17,202
  19,482
  21,855
  24,323
  26,889
  29,555
  32,326
  35,206
  38,199
  41,312
  44,549
  47,917
  51,424
  55,077
  58,883
  62,852
  66,991
  71,311
  75,822
  80,533
  85,456
  90,603
  95,985
  101,615
Total liabilities, $m
  14,363
  16,090
  17,911
  19,825
  21,830
  23,927
  26,116
  28,396
  30,769
  33,237
  35,803
  38,469
  41,240
  44,120
  47,113
  50,226
  53,463
  56,831
  60,338
  63,991
  67,797
  71,766
  75,905
  80,225
  84,736
  89,447
  94,370
  99,517
  104,899
  110,529
Total equity, $m
  11,058
  12,388
  13,790
  15,263
  16,807
  18,422
  20,107
  21,862
  23,689
  25,590
  27,565
  29,618
  31,751
  33,969
  36,273
  38,669
  41,162
  43,755
  46,455
  49,267
  52,198
  55,253
  58,440
  61,767
  65,239
  68,866
  72,657
  76,619
  80,763
  85,098
Total liabilities and equity, $m
  25,421
  28,478
  31,701
  35,088
  38,637
  42,349
  46,223
  50,258
  54,458
  58,827
  63,368
  68,087
  72,991
  78,089
  83,386
  88,895
  94,625
  100,586
  106,793
  113,258
  119,995
  127,019
  134,345
  141,992
  149,975
  158,313
  167,027
  176,136
  185,662
  195,627
Debt-to-equity ratio
  0.490
  0.580
  0.650
  0.710
  0.770
  0.810
  0.860
  0.890
  0.920
  0.950
  0.980
  1.000
  1.020
  1.040
  1.050
  1.070
  1.080
  1.100
  1.110
  1.120
  1.130
  1.140
  1.150
  1.150
  1.160
  1.170
  1.180
  1.180
  1.190
  1.190
Adjusted equity ratio
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,990
  4,427
  4,888
  5,372
  5,879
  6,409
  6,962
  7,538
  8,138
  8,761
  9,441
  10,114
  10,814
  11,541
  12,297
  13,083
  13,901
  14,752
  15,638
  16,561
  17,522
  18,525
  19,571
  20,663
  21,802
  22,993
  24,237
  25,538
  26,899
  28,322
Depreciation, amort., depletion, $m
  852
  949
  1,051
  1,159
  1,272
  1,390
  1,513
  1,641
  1,775
  1,913
  2,014
  2,164
  2,320
  2,482
  2,650
  2,825
  3,007
  3,197
  3,394
  3,599
  3,813
  4,037
  4,269
  4,512
  4,766
  5,031
  5,308
  5,597
  5,900
  6,217
Funds from operations, $m
  4,842
  5,376
  5,939
  6,531
  7,151
  7,799
  8,475
  9,179
  9,912
  10,674
  11,455
  12,278
  13,134
  14,023
  14,947
  15,908
  16,908
  17,948
  19,032
  20,160
  21,336
  22,561
  23,840
  25,175
  26,568
  28,024
  29,545
  31,136
  32,799
  34,539
Change in working capital, $m
  536
  568
  599
  629
  659
  689
  719
  750
  780
  811
  843
  877
  911
  947
  984
  1,023
  1,064
  1,107
  1,153
  1,201
  1,251
  1,305
  1,361
  1,420
  1,483
  1,549
  1,618
  1,692
  1,769
  1,851
Cash from operations, $m
  4,306
  4,808
  5,340
  5,902
  6,491
  7,109
  7,755
  8,430
  9,132
  9,863
  10,611
  11,402
  12,223
  13,076
  13,963
  14,885
  15,844
  16,841
  17,879
  18,959
  20,084
  21,257
  22,479
  23,755
  25,086
  26,475
  27,927
  29,444
  31,030
  32,688
Maintenance CAPEX, $m
  -716
  -808
  -905
  -1,007
  -1,115
  -1,228
  -1,346
  -1,469
  -1,597
  -1,731
  -1,869
  -2,014
  -2,164
  -2,320
  -2,482
  -2,650
  -2,825
  -3,007
  -3,197
  -3,394
  -3,599
  -3,813
  -4,037
  -4,269
  -4,512
  -4,766
  -5,031
  -5,308
  -5,597
  -5,900
New CAPEX, $m
  -572
  -602
  -635
  -667
  -699
  -731
  -763
  -795
  -828
  -861
  -895
  -930
  -966
  -1,004
  -1,044
  -1,085
  -1,129
  -1,175
  -1,223
  -1,274
  -1,327
  -1,384
  -1,444
  -1,506
  -1,573
  -1,643
  -1,717
  -1,795
  -1,877
  -1,963
Cash from investing activities, $m
  -1,288
  -1,410
  -1,540
  -1,674
  -1,814
  -1,959
  -2,109
  -2,264
  -2,425
  -2,592
  -2,764
  -2,944
  -3,130
  -3,324
  -3,526
  -3,735
  -3,954
  -4,182
  -4,420
  -4,668
  -4,926
  -5,197
  -5,481
  -5,775
  -6,085
  -6,409
  -6,748
  -7,103
  -7,474
  -7,863
Free cash flow, $m
  3,018
  3,398
  3,800
  4,227
  4,677
  5,150
  5,647
  6,166
  6,707
  7,272
  7,847
  8,458
  9,093
  9,753
  10,438
  11,150
  11,890
  12,659
  13,459
  14,291
  15,158
  16,060
  16,999
  17,979
  19,001
  20,066
  21,179
  22,341
  23,555
  24,824
Issuance/(repayment) of debt, $m
  1,639
  1,726
  1,821
  1,914
  2,006
  2,097
  2,188
  2,280
  2,373
  2,468
  2,566
  2,667
  2,771
  2,880
  2,993
  3,112
  3,237
  3,369
  3,507
  3,653
  3,806
  3,969
  4,140
  4,320
  4,510
  4,711
  4,923
  5,147
  5,382
  5,630
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,639
  1,726
  1,821
  1,914
  2,006
  2,097
  2,188
  2,280
  2,373
  2,468
  2,566
  2,667
  2,771
  2,880
  2,993
  3,112
  3,237
  3,369
  3,507
  3,653
  3,806
  3,969
  4,140
  4,320
  4,510
  4,711
  4,923
  5,147
  5,382
  5,630
Total cash flow (excl. dividends), $m
  4,657
  5,125
  5,621
  6,141
  6,683
  7,247
  7,835
  8,446
  9,080
  9,740
  10,413
  11,124
  11,864
  12,632
  13,431
  14,262
  15,127
  16,028
  16,966
  17,944
  18,964
  20,028
  21,139
  22,299
  23,511
  24,778
  26,102
  27,488
  28,937
  30,455
Retained Cash Flow (-), $m
  -1,246
  -1,329
  -1,402
  -1,474
  -1,544
  -1,614
  -1,685
  -1,755
  -1,827
  -1,900
  -1,975
  -2,053
  -2,133
  -2,217
  -2,305
  -2,396
  -2,492
  -2,594
  -2,700
  -2,812
  -2,931
  -3,055
  -3,187
  -3,326
  -3,473
  -3,627
  -3,790
  -3,962
  -4,144
  -4,335
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  3,411
  3,795
  4,219
  4,667
  5,138
  5,633
  6,150
  6,690
  7,253
  7,839
  8,437
  9,071
  9,730
  10,415
  11,127
  11,866
  12,635
  13,434
  14,266
  15,132
  16,033
  16,973
  17,952
  18,973
  20,038
  21,150
  22,312
  23,525
  24,794
  26,120
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  3,270
  3,475
  3,672
  3,843
  3,983
  4,088
  4,155
  4,182
  4,167
  4,110
  4,007
  3,871
  3,700
  3,497
  3,267
  3,015
  2,749
  2,474
  2,197
  1,923
  1,658
  1,408
  1,177
  966
  780
  617
  479
  364
  271
  197
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

NIKE, Inc. is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories and services. The Company's operating segments include North America, Western Europe, Central & Eastern Europe, Greater China, Japan and Emerging Markets. Its portfolio brands include the NIKE Brand, Jordan Brand, Hurley and Converse. As of May 31, 2016, the Company focused its NIKE brand product offerings in nine categories: Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Men's Training, Women's Training, Action Sports, Sportswear (its sports-inspired lifestyle products) and Golf. Men's Training includes its baseball and American football product offerings. It also markets products designed for kids, as well as for other athletic and recreational uses, such as cricket, lacrosse, tennis, volleyball, wrestling, walking and outdoor activities. The Company sells a range of performance equipment and accessories under the NIKE Brand name.

FINANCIAL RATIOS  of  Nike Cl B (NKE)

Valuation Ratios
P/E Ratio 33.2
Price to Sales 4.1
Price to Book 11.3
Price to Tangible Book
Price to Cash Flow 38.6
Price to Free Cash Flow 55.4
Growth Rates
Sales Growth Rate 6.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -3.3%
Cap. Spend. - 3 Yr. Gr. Rate 4.7%
Financial Strength
Quick Ratio 19
Current Ratio 0
LT Debt to Equity 28%
Total Debt to Equity 30.6%
Interest Coverage 51
Management Effectiveness
Return On Assets 19.4%
Ret/ On Assets - 3 Yr. Avg. 17.9%
Return On Total Capital 27.8%
Ret/ On T. Cap. - 3 Yr. Avg. 26.5%
Return On Equity 34.4%
Return On Equity - 3 Yr. Avg. 30.8%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 44.6%
Gross Margin - 3 Yr. Avg. 45.6%
EBITDA Margin 16.6%
EBITDA Margin - 3 Yr. Avg. 16.4%
Operating Margin 13.8%
Oper. Margin - 3 Yr. Avg. 13.8%
Pre-Tax Margin 14.2%
Pre-Tax Margin - 3 Yr. Avg. 14.1%
Net Profit Margin 12.3%
Net Profit Margin - 3 Yr. Avg. 11.6%
Effective Tax Rate 13.2%
Eff/ Tax Rate - 3 Yr. Avg. 18%
Payout Ratio 26.7%

NKE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NKE stock intrinsic value calculation we used $36397 million for the last fiscal year's total revenue generated by Nike Cl B. The default revenue input number comes from 0001 income statement of Nike Cl B. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NKE stock valuation model: a) initial revenue growth rate of 12.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for NKE is calculated based on our internal credit rating of Nike Cl B, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Nike Cl B.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NKE stock the variable cost ratio is equal to 86.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NKE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Nike Cl B.

Corporate tax rate of 27% is the nominal tax rate for Nike Cl B. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NKE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NKE are equal to 12.2%.

Life of production assets of 6.2 years is the average useful life of capital assets used in Nike Cl B operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NKE is equal to 11.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9812 million for Nike Cl B - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1280.49 million for Nike Cl B is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Nike Cl B at the current share price and the inputted number of shares is $109.5 billion.

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COMPANY NEWS

▶ Q3 Earnings Season Preview   [04:47PM  Zacks]
▶ 3 Earnings Reports to Watch Next Week   [03:00PM  InvestorPlace]
▶ [$$] Nike Leads Rebound for Athletic Apparel Retailers   [Sep-20-18 07:48PM  The Wall Street Journal]
▶ Nike up as shareholders meet   [10:15AM  CNBC Videos]
▶ [$$] Nike Leads Rebound for Athletic Apparel Retailers   [08:46AM  The Wall Street Journal]
▶ Nike's Kaepernick ad spurs spike in sold-out items   [Sep-19-18 05:27PM  Reuters]
▶ Stocks Turn Mixed; China Trade War Pledge; Tilray Spikes   [09:47AM  Investor's Business Daily]
▶ 5 Companies Hit 52-Week Highs   [11:49AM  GuruFocus.com]
▶ Everybodys Bullish for Nikes Earnings   [11:08AM  Barrons.com]
▶ Hollywood elitists are not America: Joy Villa   [10:05AM  Fox Business Videos]
▶ Jenifer Lewis supports Colin Kaepernick   [06:44AM  Associated Press Videos]
▶ Rhode Island town council joins entities boycotting Nike   [Sep-17-18 10:02PM  Associated Press]
▶ Jenifer Lewis Explains Wearing Nike to the Emmys (Exclusive)   [08:04PM  Entertainment Tonight Videos]
▶ Nike and Kaepernick: PR disaster or move in the right direction?   [02:39PM  American City Business Journals]
▶ [$$] #NikeBoycott Is Over. Why Retail Activism Rarely Changes Sales.   [Sep-16-18 08:51PM  The Wall Street Journal]
▶ Here's What's Driving Results at Lululemon Athletica   [Sep-15-18 02:15PM  Motley Fool]
▶ The athlete endorsement model is broken   [12:00PM  Yahoo Finance]
▶ [$$] How Tech is Drawing Shoppers Back to Bricks-and-Mortar Stores   [Sep-14-18 08:15PM  The Wall Street Journal]
▶ Nike Sets Up to Sprint   [08:00PM  Barrons.com]
▶ The Midday Rundown: September 14, 2018   [01:16PM  CNBC Videos]
▶ Why traditional sports endorsements don't work   [01:04PM  Yahoo Finance Video]
▶ Nike CEO Mark Parker opposes sanctuary law repeal   [Sep-13-18 07:38PM  Fox Business Videos]
▶ A mayor in Louisiana rescinds a city's ban on Nike products   [Sep-12-18 09:27PM  Associated Press]

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