PRINCIPLES OF ACCOUNTING

(ACC 100)

Project Assignment

Contents

TOC o “1-3” h z u EXECUTIVE SUMMARY3INTRODUCTION4PROJECT FEASIBILTY5

BALANCE SHEET……………………………………………………………………………9

INCOME STATEMENT…………………………………………………………………….11

CONCLUSION13

RECOMMENDATIONT14

Q1-

EXECUTIVE SUMMARY

This paper presents an analysis of Niky that deals with the sale of Niky shoes for sports persons. Phil knight the CEO of Niky had taken sixteen years to build Niky into a competitive number one athletic-shoe company in US. During the development of Niky, Adidas a Germany company was dominant in the market and it owned about 80% of the market share. Knight marketing techniques and approach revolutionized the industry through provision of groundbreaking technologies that made Niky brand the most recognizable in the world. By 1980, Niky had dethroned Adidas in the market share.

INTRODUCTION

The CEO owned almost half of the company shares. Before the company became Niky, it began as a small company known as Blue Ribbon Sport. The CEO of the company Mr. Phillip Hampson Knight was born in 1938 in affluent suburb of Portland. He becomes one of the best middle-distant runners in his high school track team.

OUR MISSION

“The company’s mission is to provide exceptional footwear”

OUR TEAM

The company contains qualified and experienced manufactures and designer. They are responsible for creating exceptional services and incomparable footwear to their customers.

AIM

The main aim of Niky include

To attain their customer’s satisfactions

To reach all markets segments

To produce quality footwear

To operate in the global market

PROJECT FEASIBILITY

INITIAL EXPENSES

Renting expenses4,000

Labour for construction6,500

Licensing1,800

Other miscellaneous charges 2,000

Total Initial Expenses14,800

INITIAL ASSETS

Office building and properties 250,000

Office Equipments20,000

Materials 205,000

Other miscellaneous charges 7,000

Total Initial Assets Required510,000

Required capital 350,000

COST OF SERVICES

Items Price Daily Qty Weekly Qty Monthly Qty Yearly Qty Daily Exp. Weekly Exp. Monthly Exp Yearly Exp

one shoe 2 4 28 120 1440 4 28 120 1440

Closed sport Shoe 4 4 28 120 1440 8 56 240 2880

Adidas 8 14 98 420 5040 56 392 1680 20160

basketball shoes 6 2 14 60 720 6 42 180 2160

                   

TOTAL                 26640

ANNUAL VARIABLE EXPENSES

Radio and TV adverts6,100

Maintenance of equipments5,000

Other expenses 2,400

TOTAL13,500

ANNUAL FIXED EXPENSES

Rent8,500

License Renewal2,500

Business Insurance2,600

TOTAL13,600

NIKE COMPANY

BALANCE SHEET

AS AT DEC 19, 2013.

PROPERTY AND ASSETS

Property and Building140,000

Office Equipment20,000

Dental Equipment205,000

365,000

CURRENT ASSETS

Cash8,000

Prepayments4,00022,000

387,000

CAPITAL AND LIABILITIESAED

Opening capitalPrevious year’s

Investment550,000

Profit for the Year70,000

620,000

CURRENT LIABILITIES

Accounts Payable25,000

Advanced Fee from Contracts22,000

Accrued Expenses15,00063,000

683,000

NIKE COMPANY

PROFIT & LOSS ACCOUNT

FOR THE YEAR ENDED DEC 19 2013.

REVENUESAED

Dr. Professional Charges87,000

Professional Receipts19,000

Other Income11,000

117,000

Taxes2,800

Telephone1,900

Business Insurance2,600

Advertisement9,10016,400

Net Profit133,400

.

CONCLUSION

The increased demand for the products in the sporting clothing market in USA over the last 20 years provided a great opportunity for Niky Shoe Company. The only good quality brand, which existed in the US market, was Adidas shoes from Germany which were very expensive and not available. This economic situation provided a very good environment for Niky brand to take root very quickly due to its availability and affordability. Niky is usually making much profit due to its increased sales and lowered costs through economies of scale it is enjoying.

RECOMMENDATIONS

Marketing

Marketing will help the company to increase sales and reduce costs. Utilization of internet for marketing will provide Niky with an intangible asset such as market research and consumer buying trends. Through data retrieved from consumer’s Niky will be able to analyze and monitor the buying behaviours. Market research helps them to generate data to be used in analyzing the market trends to organize promotions and marketing campaigns.

Price

Niky has no problem with the price, this is because it acts as prices setter alongside Adidas and Reebok. Niky sells its products at whatever price because of an inelastic demand for its products. Expensive promotions don for Niky produced tuned consumers to believe that Niky produces quality products, which are worthy whichever price they will charge. More so, Niky does not gain competitive advantage through the prices they charge customers.