Nike Is the World's Largest Athletic Brand

question 44

Essay

Nike is the world's largest athletic brand. Its innovative and broad product line helps drive sales; however, a large majority of those sales are in the footwear business. Most of Nike's goods are produced overseas in low-cost factories and then imported to the final market. Nike currently has many of the top U.S. athletes under contract (Michael Jordan, Tiger Woods, Dwyane Wade) but international sales are still small in emerging markets. However, many competitors have attempted to copy Nike's business model (high-value branded products manufactured at low-cost), including Adidas and Reebok, while many retailers have attempted to pass on the low-cost pressure of retail consumers. Perform a SWOT analysis for Nike.

Comprehend the structure and components of an income statement.

Recognize accounts that appear in the post-closing trial balance and those that do not.

Apply the process of adjusting and closing entries for revenue, expense, and dividends accounts.

Distinguish between permanent and temporary accounts in the context of closing entries.

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Definitions:

Cost-Push Inflation

Inflation that occurs when the prices of inputs such as labor and raw materials go up, causing a reduction in the supply of these products.

Expansionary Gap

A condition where an economy's real GDP exceeds its potential GDP, leading to inflationary pressures.

Recessionary Gap

A situation where the real Gross Domestic Product (GDP) is lower than the potential GDP, indicating an economy operating below its full capacity.

Potential Output

The highest level of output of products and services an economy can achieve when all its resources are employed optimally.