Running Head: FINANCIAL RESEARCH REPORT 1 FINANCIAL RESEARCH REPORT 7 Financial Research Report Chet L. Walker Strayer University Dr. Inez Black FIN 534 – Financial Management 24 May 2020 Financial Research Report As the child of a recent retiree on a fixed income, I understand how much my mother worked for money. With that in mind, she would not be willing to work so hard for so long to frivolously squander it away in her twilight years casing risky investments. At the same time, due to her health needs, I know that I would want to make sure her money worked for her on a level to ensure she can get the care she needs without wondering how she will pay for medication or deductibles. With that in mind, I would want to find the optimum stock for her to invest in. Since she does not have the disposable income or time to recover from a huge loss, I would suggest she invest in intermediate-cap or large-cap company, and attempt to avert little-caps names altogether. The reason startups give such high returns is because they are indeed risky investments. She has a great of a chance of bottoming out as she would striking it big. Even though some small firms would suit the older individual’s investing framework, most of her picks should follow this advice (Bunker, Cagle & Harris, 2019). Moreover, if you are participating in "best of breed" firms and unique brands which conform to the rules of Graham and Buffet investing thoughts should not be a challenge. The next criteria I would use to help her pick a stock would be to find a stock that is a robust past performer. It may not give double-digit returns every year, and it can even be subject to an occasional lousy quarter. The overall thought process is the long-term plan has to be persuasive. I would want her to invest in a business that has made shareholders rich while avoiding a stock that has ruined stockholder value in the long run. She should invest in stocks that meet the metrics as mentioned earlier, and that has done well over a considerable duration. Once we weed out the type of stocks to focus on, it’s now time to zero in on a particular company. I would advise her to invest in a stock that offers a simple, reasonably direct company business model. These companies usually provide a good or service that is easily understood and extremely recognizable. Since she is not an industry expert, she should avoid companies that other investors might find complicated. That company should also be considered "best in the breed." These companies are among the best in their industry. The general rule of thumb is it is best to stick with excellent, permeating, and highly-admired brands. Additionally, if you look at the best stocks in past, have a great brand as an everyday thing. If one is looking for rapidly-emerging brands, it should not be difficult to trace one that has an antiquity of better performance. Most firms that suit this outline have a tremendous continuing traje.

1. Running Head: FINANCIAL RESEARCH REPORT 1
FINANCIAL RESEARCH REPORT 7
Financial Research Report
Chet L. Walker
Strayer University
Dr. Inez Black
FIN 534 – Financial Management
24 May 2020
Financial Research Report
As the child of a recent retiree on a fixed income, I understand
how much my mother worked for money. With that in mind,
she would not be willing to work so hard for so long to
frivolously squander it away in her twilight years casing risky
investments. At the same time, due to her health needs, I know
that I would want to make sure her money worked for her on a
level to ensure she can get the care she needs without
wondering how she will pay for medication or deductibles.
With that in mind, I would want to find the optimum stock for
her to invest in.
Since she does not have the disposable income or time to
recover from a huge loss, I would suggest she invest in
intermediate-cap or large-cap company, and attempt to avert
little-caps names altogether. The reason startups give such high
returns is because they are indeed risky investments. She has a

2. great of a chance of bottoming out as she would striking it big.
Even though some small firms would suit the older individual’s
investing framework, most of her picks should follow this
advice (Bunker, Cagle & Harris, 2019). Moreover, if you are
participating in "best of breed" firms and unique brands which
conform to the rules of Graham and Buffet investing thoughts
should not be a challenge.
The next criteria I would use to help her pick a stock would be
to find a stock that is a robust past performer. It may not give
double-digit returns every year, and it can even be subject to an
occasional lousy quarter. The overall thought process is the
long-term plan has to be persuasive. I would want her to invest
in a business that has made shareholders rich while avoiding a
stock that has ruined stockholder value in the long run. She
should invest in stocks that meet the metrics as mentioned
earlier, and that has done well over a considerable duration.
Once we weed out the type of stocks to focus on, it’s now time
to zero in on a particular company. I would advise her to invest
in a stock that offers a simple, reasonably direct company
business model. These companies usually provide a good or
service that is easily understood and extremely recognizable.
Since she is not an industry expert, she should avoid companies
that other investors might find complicated. That company
should also be considered "best in the breed."
These companies are among the best in their industry. The
general rule of thumb is it is best to stick with excellent,
permeating, and highly-admired brands. Additionally, if you
look at the best stocks in past, have a great brand as an
everyday thing. If one is looking for rapidly-emerging brands,
it should not be difficult to trace one that has an antiquity of
better performance. Most firms that suit this outline have a
tremendous continuing trajectory record of creating stockholder
value.
Based on the rationale for picking a stock that meets all of these
requirements, I would suggest that she invest in Nike, Inc. Nike
designs, grows, markets, and retails athletic footwear, attire,

3. equipment, and fittings global. Through its parent company and
several subsidiaries- Jumpman, Converse, Chuck Taylor, All-
Star, One Star, Star Chevron, Jack Purcell and Hurley trademark
- they offer brands in multiple groupings, comprising running,
football, training, basketball, and casual wear. It markets
brands for all genders and age groups across numerous
professional and recreational athletic uses. They also sell
clothing with approved college and qualified team and league
logos and retails sports clothing and accessories.
Analysis of Financial Ratios
Nike has been one of the most consistent performers over the
past three years. Based on the analysis of financial statements
over the past three years, Nike has remained one of the top
performers in its field. I would use two sets of ratios to
determine the financial health of Nike. I would first look at a
set of liquidity ratios, primarily the current ratio, quick ratio,
and cash ratio. Liquidity ratios are essential classes of fiscal
metrics used to conclude a debtor's capability to pay off
contemporary debt obligations without the requirement to raise
external capital (Bunker, Cagle & Harris, 2019). Liquidity
ratios estimate the potential of a firm to pay debt debts and its
margin of safety.
Liquidity Ratios
Liquidity Ratios
2019
2018
2017
Current Ratio
210%
251%
293%
Quick Ratio
139%
163%
201%
Cash Ratio

4. 51%
87%
113%
The first ratio I analyze is the current ratio. The working
capital ratio estimates the potential of the company to settle
short-term obligations or those in arrears within one year. Nike
has maintained a current ratio over 2 for the last three years
(Ee, Agarwal, Goyal, Panigrahy & Pushkar, 2019). The latter
means they have almost three times the capital needed on hand
to meet its short term obligations.
The quick ratio, on the other hand, is also called the acid-test
ratio. Quick ratio estimates the potential of a firm to meet its
interim obligations with its most liquid investments. This ratio
ignores stocks from its contemporary assets. Nike has
consistently maintained a quick ratio of over 1. The latter
points to adequate liquidity even after eliminating stocks, with
over $1 in assets that can be converted promptly to cash for
every dollar of contemporary liabilities.
I would finally have analyzed the cash ratio. Cash ratio is more
conformist compared to the other ratios because it only
contemplates a firm’s most liquid resources. It informs
creditors and experts the assessment of contemporary assets that
could easily be converted into cash, and what proportion of the
firm’s present liabilities these cash and near-cash investments
may cover. It is considered a gauge of a company’s worth under
the worst-case scenario, such as if the firm were about to go out
of the industry. Nike had a cash ratio of over 1 in 2017, almost
.9 in 2018, and over .5 in 2019 (Ranjan, 2016). Even though
Nike does not maintain $1 in cash for each dollar of liabilities,
taken into account with the other ratios, the company remains
exceptionally liquid to cover any short term liabilities without
the need to raise capital (Ranjan, 2016).
The next set of ratios I would use to determine the financial
health of Nike are profitability ratios. Profitability ratios
comprise of a group of metrics show how great companies use

5. their existing assets to make profit and value for shareholders
over time. (Bunker, Cagle & Harris, 2019). The profitability
ratios I will concentrate on are operating margin, profit margin,
and return on equity. Higher ratio outcomes are usually more
promising, but the ratios offer a lot of data related to findings
from the other, comparable firms, the firm's past enactment, or
the industry mean.
The table below shows Nike's profitability ratios.
Profitability Ratios
2019
2018
2017
Operating margin
12%
12%
14%
Profit Margin
10%
5%
12%
After-Tax ROE
45%
20%
34%
The operating margin estimates the profit a firm makes per each
dollar of sales, after paying for adjustable costs of production
(Bunker, Cagle& Harris, 2019). Nike has maintained an
operating margin of over 10% for the last three years. This
margin is most beneficial when used to compare to other
companies in the same industry to determine how efficient the
company is operating.
The net profit margin measures the potential of the firm to
generate revenue after taxes. The profit margin shows how
many cents of income has been made per each dollar of sale. It
is used by creditors, financiers, and companies themselves as
indicators of a firm's financial vigor, management's skill, and

6. development potential. Nike averaged about 9% profit margin
over the last three years (Prigge & Tegtmeier, 2019). The latter
would also need to be compared to other companies in the
industry but shows that the company has made money every
year.
The final ratio, ROE, is a ratio that is most important to
company shareholders because it estimates their potential to
earn a profit on their equity assets. ROE can rise with no equity
addition if it can profit from a sophisticated return that is aided
by a more extensive asset base. Since Nike is such a large
company, it can upsurge its asset extent (Fang, 2018). This, in
turn, generates more profit with higher margins. Nike has
averaged a 33% ROE, which means stockholders can maintain
much of the yield growth when surplus assets are the
consequence of efficient debt use (Prigge & Tegtmeier, 2019).
Risk Level of the Stocks
Since Nike has maintained profits over the last three years and
has more than enough assets to cover its obligations, I believe
the company is positioned itself to remain viable for years.
Since the company enjoys licensing deals with multiple
professional leagues, numerous academic, athletic institutions,
and provides good that are essential for large amounts of the
general public, the company is relatively low risk to buy.
To manage the risks that could come with purchasing any stock,
an investor could look to diversify by purchasing shares in other
industry leaders such as Reebok, Adidas, or Under Armour. But
as long as sports remain viable in public institutions, and
professional leagues remain viable as a source of industry
throughout the world, Nike is positioned to reap the benefits of
these activities.
Recommendations
Nike currently has a market cap of over $139 Billion, yet is
trading for under $100 a share. That means that it is a very
large company, but there is no large barrier to entry for new
investors. And since the company has been around for almost
40 years, it has a long proven track record for how it has

7. performed for investors.
Since Nike is a large-cap company that offers an easy-to-
understand, fairly straightforward company business model, it is
an easy investment choice. This company has a tremendously
established brand that is also "best in the breed." It has shown
that it has been a strong past performer, with more than enough
cash and assets to facilitate growth or survive a downturn. Nike
also currently pays out dividends. It is currently paying out a
1.11% dividend quarterly to investors. It is in a viable field,
serves multiple swaths of the country, and has numerous
subsidiaries to provide a viable product to large numbers of the
population. It would be foolish not to buy this stock.
References
Bunker, R. B., Cagle, C., & Harris, D. (2019). A Liquidity Ratio
Analysis of Lean vs Not-Lean Operations. Management
Accounting Quarterly, 20(2), 10.
Ee, B., Agarwal, H., Goyal, S., Panigrahy, A., & Pushkar, A.
(2019). Institutional Research 101: Analyst Reports. Finding
Alphas: A Quantitative Approach to Building Trading
Strategies, 179-193.
Fang, J. (2018). Study of Relationship Between Liquidity Risk
(Quick Ratio) and Internal and External Factors in Nike
Company.pdf.
Prigge, S., & Tegtmeier, L. (2019). Market valuation and risk
profile of listed European football clubs. Sport, Business and
Management: An International Journal.
Ranjan, W. (2016). The Financial Performance Analysis of Nike
Inc: with Special Reference Year 2015 Annual Report.
Appendix
Table showing Nike’s Liquidity Ratios
Liquidity Ratios
2019
2018
2017

8. Current Ratio
210%
251%
293%
Quick Ratio
139%
163%
201%
Cash Ratio
51%
87%
113%
The table shows Nike's profitability ratios.
Profitability Ratios
2019
2018
2017
Operating margin
12%
12%
14%
Profit Margin
10%
5%
12%
After-Tax ROE
45%
20%
34%
Post 1
Considerations when collecting data via Interview
When collecting data via Interview, an individual should
consider the issues, opportunities, environment, and people to

9. be interviewed. The considerations on problems and
opportunities would help the interviewer to identify what is
happening both internally and externally within the place of
collecting data. Besides, on the people to be interviewed, the
interviewer should consider the interviewee's background and
what he or she would like to be asked as they are always
allowed to give a personal opinion. The second aspect to
consider is that the information to be collected would be done
consistently, complying with the interviewee's instructions, and
the main aim of the research. Finally, the interviewer should
consider the power relationship and how to create a rapport with
the interviewee. Building rapport and an excellent relationship
with the interviewee would be essential in ensuring that the
interviewee gives the relevant information. It also provides the
interviewer with an opportunity to ask more questions about the
topic.
Interview questions to elicit from James Rockford students
1. From the digital research tools, which one do you prefer
using while getting or sharing information?
2. Which platforms do you prefer communicating with, for
example, e-mails or zoom and many more?
3. How long do you use your computer, and how fast can you
type like a hundred words?
4. Between qualitative and quantitative methods, which one
would you prefer using when doing research?
5. Which information do you always find necessary from the
research that you do use your computer?
6. Which software do you use most while operating your
computer?
Post 2
Why are qualitative methods better suited for conducting action
research?

10. Qualitative methods are highly appropriate to carry out action
research because of four major reasons. First, qualitative
methods help in identifying the constantly changing attitudes
within the study group as the participants get subjected to a
given intervention. This enables the researcher to get real-time
feedback on the participants. Second, qualitative methods are
not as rigid as quantitative techniques. Therefore, all
information gathered can shed insight into the research
regardless of whether it meets the researcher's expectations or
not. Qualitative methods add context to data that is purely
constituted of figures or numbers (Rahman, 2017).
Third, qualitative methods are very flexible and ensure that
researchers can constantly alter their research questions,
variables, and settings to fully comprehend the participants'
responses in diverse scenarios. This can happen in real-time
without having to stop the research process. Finally, the data
obtained through qualitative means ensure that researchers are
able to be highly speculative of the things they want to study
and how to go about the process. Overall, the flexibility of
qualitative methods is beneficial for action research, which
typically occurs when participants go about their daily lives.
Assignment 1: Financial Research Report
Part 2 Due Week 9 and worth 155 points
Imagine that you are a financial manager researching
investments for your client. Think of a friend or a family
member as a client. Define her or his characteristics and goals
such as an employee or employer, relatively young (less than 40
years) or close to retirement, having some savings/property, a
risk taker or risk averter, etc. Next, use Nexis Uni at the Strayer
University library, located at Nexis Uni, click on "Company
Dossier" to research the stock of any U.S. publicly traded
company that you may consider as an investment opportunity
for your client. Your investment should align with your client's

11. investment goals. (Note: Please ensure that you are able to find
enough information about this company in order to complete
this assignment. You will create an appendix, in which you will
insert related information.)
Your final financial research report will be 6 to 8 pages long
and be completed in two parts as noted below. This assignment
requires you to use at least five quality academic resources and
cover the following topics:
· Rationale for choosing the company in which to invest
· Ratio analysis
· Stock price analysis
· Recommendations
Refer to the following resources to assist with completing your
assignment:
Stock Selection
· Forbes: "Six rules to follow when picking stocks"
· CNN Money: "Stocks: Investing in stocks"
· The Motley Fool: "13 steps to investing foolishly"
· Seeking Alpha: "The Graham And Dodd Method For Valuing
Stocks"
· Investopedia: "Guide to Stock-Picking Strategies"
· Seeking Alpha: "Get Your Smart Beta Here! Dividend Growth
Stocks As 'Strategic Beta' Investments"
Market and Company Information
· U.S. Securities and Exchange Commission: "Market structure"
· Yahoo! Finance
· Mergent Online (Note: This resource is also available through
the Strayer Learning Resource Center.)
· Seeking Alpha (Note: This is also available through the
Android or iTunes App store.)
· Morningstar (Note: You can create a no-cost Basic Access
account.)
· Research Hub, located in the left menu of your course in
Blackboard
Part 1 Due Week 7 (1 to 2 pages)

12. 1. Provide a rationale for the stock that you selected, indicating
the significant economic, financial, and other factors that led
you to consider this stock.
2. Suggest the primary reasons why the selected stock is a
suitable investment for your client. Include a description of
your client's profile.
3. Just list five resources you'll use to complete this assignment
and begin to build your reference list. Remember you must use
at least five quality academic resources for the final assignment.
Part 2 Due Week 9 (6 to 8 pages including #1 and #2 from Part
1)
1. Include your rationale, primary reasons for stock selection,
and client's profile from Part 1, making any revisions based
upon Part 1 feedback if applicable.
2. Select any five financial ratios that you have learned about in
the text. Analyze the past 3 years of the selected financial ratios
for the company; you may obtain this information from the
company's financial statements. Determine the company's
financial health. (Note: Suggested ratios include, but are not
limited to, current ratio, quick ratio, earnings per share, and
price earnings ratio.)
3. Based on your financial review, determine the risk level of
the stock from your investor's point of view. Indicate key
strategies that you may use in order to minimize these perceived
risks.
4. Provide your recommendations of this stock as an investment
opportunity. Support your rationale with resources, such as
peer-reviewed articles, material from the Strayer University
Library, and reviews by market analysts.
5. Conduct a literature review and list at least five quality
academic resources. Note: Wikipedia and other similar websites
do not qualify as academic resources.
Your assignment must follow these formatting requirements:
· Be typed, double-spaced, using Times New Roman font (size
12), with 1-inch margins on all sides; citations and references
must follow the Strayer Writing Standards (SWS). The format is

13. different than other Strayer University courses. Please take a
moment to review the SWS documentation for details.
· Properly cite all sources.
· Include a cover page containing the title of the assignment, the
student's name, the professor's name, the course title, and the
date. The cover page and the reference page are not included in
the required assignment page length.
The specific course learning outcomes associated with this
assignment are as follows:
· Determine the suitability of an investment strategy that
considers external risk factors and a literature review.
· Create investment recommendations based on research that
includes the rationale and risk mitigation for the chosen
strategies.