Business Analyzer Worksheet

Name of Business: __Nike (NKE)____________________________________

1. Does the company have an identifiable durable competitive advantage?
If yes, describe it in as simple a manner as you can.

1. Pass / Fail

Yes, Nike has millions of users. They have had many years of experience; people think very highly
of their brand. Nike is durable because people like the brands quality.

2. Do you understand how the business product/service works?

If yes, describe how the product/service works.

2. Pass / Fail

Yes. Nike is able to sell a lot of their products because they have a competitive advantage. They also
make money off of their other sporting apparel & accessories.

3. Will the businesss product/service be obsolete in 20 years?

If no, explain why the product/service will not be obsolete in 20 years.

3. Pass / Fail

Nike may not be obsolete, but they most likely will not be leading the sporting apparel industry as
much as they are today. They may not be as popular in 20 years because fashion changes all the
time.

4. What is the companys per share earning history and growth rate?
(Finding Information on morningstar.com)
EPS (Earnings Per Share) --- Type Ticker Symbol in Get QuoteFinancials
Year
EPS

2006
.66

2007
.73

2008
.94

2009
.76

2010
.97

2011
1.0

2012
1.18

2013
1.36

Has companys EPS consistently gone up each year? yes

If not, was the weakness a one-time event? ______

2014
1.49

2015
1.85

4. Pass / Fail

5. Is the company consistently earning a high return on equity?

(Finding Information on morningstar.com)
ROE for past ten years --- Key Ratios (will only show last 5 years)
Year

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Business Analyzer Worksheet

Return on
Equity

23.3
4

22.41

25.3
6

18.0
0

20.6
7

5 -Year Average Return on Equity _23.83%_______

21.7
7

21.9
8

23.0
8

24.50

27.82

Higher than 15%? yes 5. Pass / Fail

6. Does the company have a lot of debt?

6. Pass / Fail
Long-term debt in the current year of the business / Total net earnings in the current year of the business
1,079,000

3,273,000 = .3296669722

Long term debt should not be more than five times current net earnings
(Finding Information on morningstar.com)
Long Term Debt ---Financials - Balance Sheet --- (Click Annual tab at top; Look at current
year)
Total Net Income ---Financials - Income Statement (Click Annual tab at top; Look at
current year)
7. Is the company free to raise prices with inflation?

7. Pass / Fail

If the price of the product has risen on an average of at least 4% a year over the last twenty years, then
you can bet the farm that its the kind of business that can raise prices along with inflation.
8. Are large capital expenditures required to update plant and equipment?
(Does the product/service require expensive changes or upgrades?)

8. Pass / Fail

Price Analysis
9. Is the companys stock price suffering from a market panic, a business recession, or an individual
calamity that is curable?
9. Pass / Fail
10. Use this formula to determine if the business is undervalued, fair valued, or overvalued.
P/E Ratio (Price / Earnings) / 5-Year Annual Avg. of Net Income =
____18.02______

___8.56_______

___2.1028_______

0 1 = Company is undervalued
10. Undervalued/Fair value/Overvalued
1 2 = Company is fair valued
2 3 = Company if overvalued
(Finding Information on money.msn.com/)
P/E Ratio --- Valuation Price/Earnings (1st Column)
Net Income 5 Year Average ---Valuation Price/Earnings (4th Column)

Business Scorecard:
#1

#2

#3

#4

#5

Competitiv
e
Advantage

Understan
d
Business

Product/Servic
e
Obsolete in
20 years

Earnings
Per Share
(EPS)

Return
on
Equity
(ROE)

#6

#7

#8

#9

#10

Debt

Free to
Raise
Prices

Large
Cap. Exp
Needed

On Sale

Valuation

Business Analyzer Worksheet

Pass

Pass

Pass

Pass

Pass

Pass

Pass

Pass

Pass

Fail

Fail

Fail

Fail

Fail

Fail

Fail

Fail

Fail

Undervalue
d
Fair valued
Overvalued