Apollo Shoes Audit Report

The background of this paper we need to mention is that West Coast Fashions, Inc. (WCF), a large designer and marketer of branded apparel announced a strategic reorganization calling for a divestiture of certain assets, and one of the divisions it intended to shed was Mercury Athletic, its wholly owned footwear subsidiary. John Liedtke, the head of business development for Active Gear, Inc. (AGI), a privately held athletic and casual footwear company, contemplated an acquisition opportunity of Mercury that would significantly improve his business. So, he wanted to evaluate this opportunity.

sale of Nike’s high-margin products to high-end customers. Regardless of the low cost of the World Shoes, they

The report focuses on the Economic Value Added of Nike Inc. The analysis is conducted through a detailed assessment of the financial statements including income statement, balance sheet, and cash flow. Such financial statements are then applied to derive common-size statements for income statement and balance. The trends and predictions obtained from the common-size statements predict the future economic value. Similarly, the Pro-forma financial statements derived provide vital future economic performances of Nike Inc. According to the regression analysis and the assessment of the common-size and Pro-forma financial statements; Nike Inc. has a growth in revenue and earnings per share. The EVA computed using WACC, Net Operating Profit after Taxes (NOPAT), and Invested Capital is positive (+$391.24); this shows that Nike Inc. is financially stable and will grow in the next three years.

The following memo aims to outline the results of the audit of Apollo Shoes, give recommendations to improve the company’s operations, and provide justification for our qualified opinion.

Apollo Shoes, Inc. has always been known for its leadership position in electronic shoe technology, but we are now committed to expanding our marketing focus. With new applied technologies, Apollo Shoes, Inc. can maintain its tradition of high tech electronic performance and style. We continue to work on and improve the SPEAKERSHOE, an athletic shoe with an amplified loudspeaker, originally designed for the international recording group "Mythic Meathook." We are hard at work on new ideas, such as the PHONESHOE, the sneaker with a cellular phone for those executives who like to simultaneously combine exercise with work. We anticipate that the PHONESHOE will capture a significant piece of this quickly expanding market.

Apollo Shoes Inc. is a medium-sized corporation. It has over 100 employees organized in five department including Marketing, Finance, Information Systems, Operations, and Legal Affairs. Apollo is a distributor of a technologically superior athletic product. Siren, Spotlight and Speakershoe are Apollo's premiere brands. Their products are shipped to large and small retailers across a six-state area.

The annual report provides important company and financial information to investors, customers, employees, and the public. A company's balance sheet displays a company's assets, liabilities, and equity. Running a company involves continual examination and evaluation of its performance. Ensuring the continued profitability of an enterprise, the use of financial ratios is vital to analyze. Utilizing this data, I evaluated Nike Inc., Dicks' Sporting Goods, and Costco's annual reports. I focused on the balance sheets for 2016, to calculate the working capital, current ratio, and quick ratios in an effort to determine their liquidity. Also does my analysis coincide with the company's Management Discussion and Analysis (MD&A).

The price of Nike’s common stock has gone down in the past five years. It was at its highest point in 1997 and next highest in 1999.

* Look for and inquire about obsolete or damage items that are rusted or dust covered, and located in inappropriate places

I will coordinate and supervise a team of staff auditors. The staff auditors gather and test the evidence supporting the information in the audit. The audit manager, Darlene Wardlaw, reviews all audit work, prior to the review by a firm partner, Arnold Anderson. Mr. Anderson has the ultimate responsibility in ensuring an adequate review. A written report will complete the audit or review with AOW’s opinion of the audited information. It will show if the audited information is in accordance with accounting standards and also provides third parties with an adequate representation of Apollo Shoes, Inc.’s financial situation.

NIKE’s positive net income growth rate is heavily impacted by items reported under “Other Income”. One component of “Other Income” consists of the foreign currency conversion gain/ loss that NIKE sustains. As a global retailed the impact of foreign currency transactions is unavoidable. The net effect of foreign currency is driven up by a gain of $26 million dollars for fiscal year 2016 which is significantly less than the $147 million reported for fiscal year 2015. This is a result in the volatility of the global economy. The subsequent increase of $114 million in “Other Income” reported due to a legal judgment related to a bankruptcy case in Western Europe for fiscal year 2016 as well as unrealized gain and loss on securities and other income.

Investing in a company has certainly changed over the years. Financial information is literally at one's fingertips via the internet. In today's fast paced corporate environment companies are under tremendous scrutiny to maintain their edge. The company I am evaluating is NIKE. This Financial analysis will consist of the following: Ratios from the Income Statement, Statement of Owner's Equity, and Balance Sheet. This information is designed to assist a potential investor.

New Balance International was founded during the early 1990s specializing in orthopedic footware to improve the fit of their shoes. Today the company continues its founding values in a highly specialized niche business of providing athletic footware in a wide range of widths and sizes which distinguishes the product from its competitors. With the philosophy of “one size did not fit all,” New Balance expanded operation from the US and currently markets its product in 160 countries in six continents. New Balance Inc. first appeared in South Africa In 1976 when a Durban based company obtained a license to distribute the brand. Under this distribution plan the company held a very small percentage of

The following content provided will include information regarding Nikes Inc. cash management strategies, which will include more in depth information from the previous group paper. In addition, working capital recommendations will be provided to senior management base on next year’s in the pro-forma financial statements.

Disclosed events, transactions, and other matters have occurred and pertain to the entity. (Occurrence and rights and obligations)