Credit Analysis

Circumstances leading to need for the loan

With the improvement of living standards, people choose to pay more attention to the sporting goods brands and express individuality. As the world's first sports brand, Nike, has been focusing on personalized products. So the group need long-term debts to keep liquidity and sufficient capital would be prepared for design and advertising business. Because of Nike’s business steady development, the lenders could anticipate the loan should be secure and low risky.

Credit history

We hardly find any default record of Nike. On one hand its superb performance in market ensures the liquidity sufficient; on the other hand, as a well-known enterprise Nike has enough resources to get funds to pay off the debts.

Cash flow

Year 2011 to 2013, net cash flow of operation was 1812 million , 1899 million ,3027 million respectively. Cash flow increased year by year, which means increased of cash and tax refund by sales of goods and services.

Year 2011 to 2013, net cash flow of investment was -1021million, 514 million, -1067million, respectively. The firm swung from maturities of short-term investment and bought new investment.u

Year 2011 to 2013, net cash flow of financing activities was -1972million, -2118million ,-1040 million since firm paid dividends and repurchase common stock . In 2012, Nike realized $ 8 billion stock repurchase program. In 2013, Nike company completed $ 5 billion stock buyback. Nike said it is a more cautious approach to use the company's capital. In addition, in 2013 ,payment of long-term debt was lower, so amount of finance decreased.

We also see that both short-term and long-term liabilities increased respectively, which is also due to their positive operating policy. As well as dividend increased also shows a good signal of future prospect.