|
Reebok |
Year 5 |
Year 4 |
Year 3 |
Year 2 |
Year 1 |
|
Average collection period |
49.96 |
46.98 |
49.22 |
53.58 |
58.86 |
|
Inventory turnover |
5.71 |
5.06 |
5.01 |
4.40 |
3.76 |
|
Average inventory days outstanding |
63.95 |
72.10 |
72.88 |
82.88 |
97.17 |
|
Long-term operating asset turnover |
13.67 |
12.62 |
12.31 |
10.25 |
9.03 |
|
Accounts payable turnover |
13.33 |
13.16 |
12.66 |
10.92 |
9.99 |
|
Average payable days outstanding |
27.37 |
27.74 |
28.83 |
33.43 |
36.54 |
Required:
a. Describe and interpret how the recent five-year trend in the components of ROCE determine the ROCE for both Nike and Reebok.
b. Recommend a “buy” on one of these companies based on your analysis. Support your recommendation with reference to your analysis in (a).