Financial performance is one of the key elements of any firm, firms go into business in order to make revenue that is the bottom line. New firms have to play a very hands on approach in their financial planning in order to ensure they are hitting the targets they forecasted to hit and revise the business plan if there are risks of missing the target. The first-year financial performance is generally projected on a monthly basis because it is crucial to monitor where and how the money is being used as there is no historical data points in order to make long term projections. Therefore, monthly projections help the business identify whether they are on track or off track through the frequent monthly check up and if there’s any corrective action that needs to take place without delay. Monthly forecast is also useful for organizations that might have a big population of part time employees due to schedule changes, a big reliance on supplies and equipment as estimates could vary greatly depending on demand need.

Firms will decide to shift into a quarterly analysis after the first year of business as they begin to feel more confident on their financial outlook and they have enough historical data points to make educated financial decisions. They are able to use these historical data points to make decisions on the expected future therefore it is easier to review on a quarterly basis and identify whether they are on track or not. After a year in business, firms aren’t typically having to be so reactive to the environment but rather more proactive in their planning. Quarterly forecasting shows the seasonal influence on a business and its cost for the business. As the business is set now, the understanding of these micro parameters that might affect the financials of a business are very important to know how the current year is shaping up.

Financial statements offer manifold years of figures and data information. By putting together the data, it can track performance measures across financial statements via numerous different procedures for financial statement analysis which includes vertical and horizontal study and its projections. Utilizing return on assets (ROA) and return on equity (ROE) comparison can be made of the organization net income from the income statement with assets and investor’s equity from the balance sheet

During our company analyses, we will concentrate on utilizing these financials statements to also asses the health of Nike’s current debt situation. We have already been able to identify large amounts of debt that are coming due, but we are also observing large amounts of revenue coming in. We will need to determine how we’ll be able leverage assets to get money in order to implement some of the changes we’re looking for which include a large investment in innovation to deliver new products into a new segment.