Working Capital Project: Compare and Contrast - Assignment Example

Most financial businesses analyze their working capital in order to measure their company performance and to determine their current position. The primary aim of the report below is to provide an assessment of two companies based on their working capital. The second purpose is to identify the most suitable firm for both investment and to provide a loan all based on their working capital evaluation. Nike Shoe Company is among the world’s top clothing and sportswear manufacturer in the United States with its Headquarters located in Washington DC.

The Industry’s working capital structure has two main components, which are debts and equity. The working capital turnover was 3.38, which was above one: therefore, the amount of current assets was greater than the amount of current liabilities. In the 2008 fiscal year, Nike met and achieved more than its set goals. The revenue grew 14% to $18.6 billion. On the same note, net income grew 26% to $ 1.9 billion and distributed diluted earnings per share of $3.74, which was a 28% rise compared to that of the previous year.

These results were due to the gains arising from the sale of Starter Brand together with Nike Bauer Hockey businesses of $35.4 million. Nike approximates the combination of favorable foreign currency- denominated profits from international transactions. In the same financial year, Nike increased its converse sales from $1.5 to $ 2.0 billion; twenty nine percent increase from the previous year. The increase owes to the sale of the converse to new markets such as Brazil, China and Russia. The organizations quarterly dividend rose by 9 percent to $0.

25 per share from $0.23, which featured in the last financial year (Rauh, 2008). Another clothing and sportswear company found in the United States is the Columbia Sportswear having its headquarters in Washington DC. During the same financial year as Nike Inc, Columbia