Part of Nike's strategy to revitalize the company was aimed at addressing their revenues which had been fixed for four years and their net income which had fallen to almost $220M. Additionally, Nike had been losing overall market share and the strong dollar had adversely affected revenue. To address those issues, management was planning to; (1) raise revenue by developing increased levels of athletic-shoe products in the mid-priced segment. (2) Push its well performing apparel line, and (3), …
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showed last 75 words of 1193 total
…Cash + Accounts Receivable + Inventory) - (Accounts Payable + Accruals) + (Property, Plant & Equipment) = $4,064.2 EVA = ((Net operating profit/Invested Capital) - WACC) * Invested Capital = $212.1 Given that the ROIC, or the Operating Profit/Invested Capital, is greater than the WACC, we can conclude that the Nike adds value from investments and that with the new strategy shareholder's value will increase due to a raise in the stock price. EVA strengthens my point of adding Nike to Ford's portfolio.