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    1: Accounting Return Analysis:: Average

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    nazish
    This document presents financial data for a company over a 12 year period including revenue, costs of goods sold, depreciation, G&A costs, taxes, net income, book value, and return on capital employed. Revenue increased each year from $1.7 billion in year 2 to $6.7 billion in year 12. Net income fluctuated from a loss of $87 million in year 2 to a profit of $428 million in year 7, averaging $74 million over the 12 years. The return on capital employed was above the weighted average cost of capital in most years, indicating the project should be accepted.

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    1: Accounting Return Analysis:: Average

    Uploaded by

    nazish
    26 views1 page
    This document presents financial data for a company over a 12 year period including revenue, costs of goods sold, depreciation, G&A costs, taxes, net income, book value, and return on capital employed. Revenue increased each year from $1.7 billion in year 2 to $6.7 billion in year 12. Net income fluctuated from a loss of $87 million in year 2 to a profit of $428 million in year 7, averaging $74 million over the 12 years. The return on capital employed was above the weighted average cost of capital in most years, indicating the project should be accepted.

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    an investment analysis case study - Nike ROCE

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    This document presents financial data for a company over a 12 year period including revenue, costs of goods sold, depreciation, G&A costs, taxes, net income, book value, and return on capital employed. Revenue increased each year from $1.7 billion in year 2 to $6.7 billion in year 12. Net income fluctuated from a loss of $87 million in year 2 to a profit of $428 million in year 7, averaging $74 million over the 12 years. The return on capital employed was above the weighted average cost of capital in most years, indicating the project should be accepted.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    26 views1 page

    1: Accounting Return Analysis:: Average

    Uploaded by

    nazish
    This document presents financial data for a company over a 12 year period including revenue, costs of goods sold, depreciation, G&A costs, taxes, net income, book value, and return on capital employed. Revenue increased each year from $1.7 billion in year 2 to $6.7 billion in year 12. Net income fluctuated from a loss of $87 million in year 2 to a profit of $428 million in year 7, averaging $74 million over the 12 years. The return on capital employed was above the weighted average cost of capital in most years, indicating the project should be accepted.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    1: ACCOUNTING RETURN ANALYSIS: ( All Amounts in Millions $)

    Years 0 1 2 3 4 5 6 7 8 9 10 11 12
    Revenue   0 0 1,736 2,279 2,872 3,518 4,221 4,986 5,817 6,108 6,414 6,734
    YEARS 0 1 2 3 4 5 6 7 8 9 10 11 12 AVERAGE
    - Cost Of Goods
    1,0 2,0 2,5 2,6 2,3 2,1 2,0 3,0 2,7 2,5 2,2 2,0 1,7
    BV OpeningSold 00   00     001337 201755 2211
    58 2709
    59 123250 333840 74 4479 45 470378 4939
    05 5186 
    12
    - Depreciation       300 240 192 154 1,12 312 287 287 294 315 390
    Add: Invest.             6              
    - Allocated G&A       166 30 187 24210 19235 15 262 31 291 28 323 28 33929 31
    356 39374
    Less: Dep   - - 0 0 2 4 2 7 7 4 5 0  
    - Advertising
    Expenses       12 79 3 82 4 85 4 89 4 92 5 96 5 100 2 104 2 1082 112
    Add: W.C   - 0 8 1 5 9 3 8 0 1 2    
    1,0 2,00 2,6 2,35 2,15 2,0 3,03 2,77 2,54 2,27 2,0 1,71 1,32
    Pre-Tax Income   0 0 -146 15 173 331 305 473 628 668 696 673
    BV Closing 00 0 20 8 9 12 3 4 5 8 05 2 2  
    Taxes 1,0  
    2,00 0 0 2,5 -58 2,48 6 2,25 69 2,0132 2,52 122 2,90 189 2,66 2512,41 2672,1 278
    1,85 269
    1,51
    AVG. BV Net Income 00   0    60 -87 9 9 9104 86199 3 183 4 284 0 377 2 40142 4189 7404 
    (8 10 19 18 28 37 40 41 40
    Net Income - - - 7) 9 4 9 3 4 7 1 8 4  
    (0.035 0.004 0.049 0.078 0.063 0.106 0.156 0.187 0.224 0.266
    ROCE % - - - 0) 0 9 9 0 8 3 3 9 3 0.11

     Project should be accepted as ROCE > WACC

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