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Strategy Implementation - NIKE - Essay Example
Pages 3 (753 words)
Strategy Implementation – NIKE Name: Institution: STRATEGY IMPLEMENTATION - NIKE Return on Invested capital is an accounting measure that shows how well an organization is generating cash flow in relation to capital invested in it (Harper, 2012). Usually expressed in the form of a percentage, it is calculated by subtracting the adjusted taxes from operating profit and dividing the result by invested capital…
For a large capital company, these continued gains are an amazing performance. This paper is a strategy implementation for Nike. (Nike Inc., 2012) While the statistics above shows strength in Nike’s strategy, this ratio has several limitations. It does not account for the money’s time-value, in addition to the risk associated, with an investment or stock (Harper, 2012). The ratio also overvalues investments as the equation overlooks long-term costs in favor of short-term savings. Finally, since they can be calculated using different criteria, these ratios have a problem with consistency. The Inventory Turnover of a company, in accounting, is a measure of the frequency at which inventory is used or sold in a set period, for example, a year (Ozyasar, 2012). The equation for its calculation involves dividing the cost of goods sold by average inventory. It is also referred to as stock turnover or inventory turns. For Nike, the inventory turnover has been dropping, although not drastically. These ratios show that while Nike does well with money collection, it has much slower in selling or using inventory in the past three years. (Nike Inc., 2012) This ratio has several limitations. ...
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