Nike Inc.'s Types of Assets and the Most Significant Assets

Nike Inc.
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1) Analyze the type of assets your company has:
a) Using the common-size balance sheet, describe which assets are the most significant?
Nike Inc. is one of the most valuable and best apparel brands in the world despite a significant drop in brand value down 10%, according to a report by Anna R. Beresin. The company had experienced tough years in the past, especially in North America where its popularity was reduced among teenagers (Beresin, 2010). From this common-size balance sheet, it is evident that the long-term assets of the company are most significant, which include property, equipment, and plant. Also, Nike Inc. has put a high level of performance on its intangible assets.
b) What are the accounting methods used to value the significant assets?
Some of the most critical accounting methods used to value the significant assets are Cost Method, Market Value Method, Base Stock Method, and Standard Cost Method. In the cost method, assets are valued by their purchase price. If the purchase price is high, then the value of assets will also be high and vice versa. In the market value method, the assets are valued by their market price. The base stock method is often used by companies like Nike Inc. to maintain a specific level of stocks. In the standard cost method, the company sets a specific standard of the cost by its track record.
c) What other information can you learn about the asset accounts from the notes? (e.g., Does your company include derivative securities as part of their cash and marketable securities?)
From these notes, I have learned that derivative security is a financial instrument whose value solely depends on the value of another asset. In the case of Nike Inc., it looks like the company does include derivative securities in its marketable and cash securities. A good example of the derivative security is a convertible bond, which can easily be converted into a fixed number of shares of the stock. The value of its convertible bond depends on the value of Nike Inc’s underlying stock.
d) Have there been significant changes to asset structure from previous years?
Compared to the previous years, a significant number of changes in the asset structure can be observed (2017). For example, Nike Inc’s performance in the previous two years was not as good as it is in 2019. In addition to the internal proportion, varying analysis indicators can be used to analyze this complex balance sheet. Both horizontal and vertical indicators reveal that there has been a huge difference between the assets and liabilities of the company.
2) Analyze the accounts receivable and allowance accounts of your company (e.g. the type, conditions, methods of valuation, changes over the year)
Nike seems to be making ongoing estimates about its allowance accounts and receivable accounts. From the information provided t...