Nike Wins for Investors, Management: Fool by Numbers

On June 26, footwear and sporting goods designer extraordinaire Nike (NYSE: NKE  ) released full-year 2007 earnings for the period ended May 31.

• How could a company named for the Greek goddess of victory fail to meet its targets? Nike delivered its customary, solid report once again.
• An effective tax rate of 32.2% -- down from 35% last year -- helped counteract rising SG&A expenses.
• A generous share buyback program then boosted earnings per share beyond the revenue growth rate. That's important to the executive team -- their stock-based bonus awards are tied to EPS and far more lucrative than the EBIT-based cash bonus. (Read the latest proxy filing for details.)
• Management is happy about the tighter inventory control, as evidenced by the much slower growth in inventory levels than in net sales.

(Figures in millions, except per-share data)

Income Statement Highlights

	FY 2007	FY 2006	Change
Sales	$16,326	$14,955	9.2%
Net Profit	$1,492	$1,392	7.1%
EPS	$2.93	$2.64	11.0%
Diluted Shares	509.9	527.6	(3.4%)

Get back to basics with the income statement.

Margin Checkup

	FY 2007	FY 2006	Change*
	43.9%	44.1%	(0.2)
	13.1%	14.1%	(1.0)
	9.1%	9.3%	(0.2)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	FY 2007	FY 2006	Change
Cash + ST Invest.	$2,847	$2,303	23.6%
Accounts Rec.	$2,495	$2,383	4.7%
Inventory	$2,122	$2,077	2.2%

	FY 2007	FY 2006	Change
Accounts Payable	$1,040	$952	9.3%
Long-Term *	$440	$666	(33.9%)

*Including current portion of $30.5 million in 2007 and $255.3 million in 2006.

The balance sheet reflects the company's health.

Cash Flow Highlights

	FY 2007	FY 2006	Change
	$1,600*	$1,334	19.9%

*Figure taken from the earnings call. No this time, and no data on or , either.

Free cash flow is a Fool's best friend.

Cash Conversion Checkup

	FY 2007	FY 2006	Change
Days in Inventory	83.6	84.8	(1.2)
Days in Receivables	54.5	56.7	(2.2)
Days Payables Outstanding	39.7	37.7	2.0
Cash Conversion Cycle	98.5	103.8	(5.4)

Read up on cash conversion metrics and their importance for retail operations.

Run for the hills:

• Foolish Forecast: Nike Ready to Run
• Stocks for Dad: Nike
• Nike Unfastens Her Sandal
• Foolish Fundamentals: Cash Conversion Cycle

Nike is a four-star stock -- out of five -- in our Motley Fool CAPS investor database, based on nearly 450 user ratings. Click on over today and weigh in on the sportswear giant's prospects!

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Anders Bylund had no position in any company mentioned, and all his sneakers are Reeboks. Fool rules are here.