The following data (in millions) are taken from recent financial statements of Nike Inc

The following data (in millions) are taken from recent financial statements of Nike Inc.:


year 2 year 1 Net sales (revenues) $19,014 $19,176 Net income 1,907 1,487 



a. Determine the amount of change (in millions) and percent of change in net income for Year 2. Round to one decimal place.

b. Determine the percentage relationship between net income and net sales (net income divided by net sales) for Year 2 and Year 1. Round to one decimal place.

c. What conclusions can you draw from your analysis?

Answer:
a.
$420 million increase ($1,907 – $1,487)
28.2% ($420 ÷ $1,487) increase

b.
Year 2:  10.0% ($1,907 ÷ $19,014)
Year 1:  7.8% ($1,487 ÷ $19,176)

c.  The net income increased during Year 2 by $420 million from Year 1. Net income as a percent of net sales also increased from 7.8% in Year 1 to 10.0% in Year 2. Both of these results are favorable trends for Nike.