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This discussion is derived from the "Analysis for Decision Making" ADM Section at the end of...

This discussion is derived from the "Analysis for Decision Making" ADM Section at the end of Chapter 3 and is being modified for our online discussion. ADM-3 asks us to look at recent data taken from Nike, Incorporated:

A) Determine the amount of change and percent of net income change from Year 1 to Year 2.

B) Determine the percentage relationship between net income and sales for Year 1 and Year 2.

When solving for A, finding the percent of change is a "horizontal analysis" problem, which takes the change in amount and divides it by the base year: $2,643 - $2,472 = 221 (the amount of change); $221/$2,472 = 8.9% of change (increase) from Year 1 to Year 2.

When solving for B, finding the percent relationship between net income and sales for Year 2 and Year 1 "vertical analysis" problems is discovered by, dividing net income by sales:

Year 1: $2,472/$25,313 = 9.76% (.0976)

Year 2: $2,693/$27,799 = 9.68% (.0968)

Discussion:

What conclusion can you draw from this analyses above?

Do you think that Nike's most recent "Just Do It" ad campaign was to boost sales or to take a political stance on a sensitive issue or both? Try to keep your comment on the accounting side versus any personal view you may possess, as I do not want anyone to be offended (please/thanks). Always keep it positive!

Finally, right or wrong aside, there was a financial impact to that ad campaign. Did it strengthen sales or decline sales? I only want you to discuss any financial impact that you can find. Were the results good or bad?

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Answer #1

Nice most recent ad campaign was absolutely a sucess as we can see a good increase in the amount of sales from year 1 to year 2 .

in year 2 the sales has increased by $221 which is a good sign for the ad campaign that Nice has planned and launched. since the ad cmaopign has launched there has been a increase in the sales by $221 and this shows that ad campaign is a sucess.

if we consider the financial impact of the ad campaign on the sales net income has reduced as in year 1 the income was 9.76% but in year 2 it was 9.68% only

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