Nike and Adidas are both known brands and are good at what they do. Nike has always been leading in terms of sportswear, sneakers and financial capabilities. Adidas is smaller than Nike overall, but what makes it different is that it has has been growing at a rapid rate over the past years making it the second-largest in the world after Nike.
Here’s a quick analysis on Nike and Adidas’ financial performance in the past 5 years. I will be focusing on three major KPIs:
- Total Revenues & Growth Rate
- Assets & Liabilities Ratios
- Cash Flows
The raw data source is from Yahoo finance and was visualized using Excel.
Total Revenues & Growth Rate
2019 Total Revenue of Nike has grown up to 27.82% and EBITDA is up 13.86% since 2015 and the growth rate is still growing in an increasing rate. As for Adidas, it has grown up to 39.75% and EBITDA is up to 164.58%.
Looking at the revenues and pace of growth, considering the sizes of the companies — it’s a tie between Nike and Adidas but looking at the Net Income, I would choose to invest on Nike.
2019 Assets & Liabilities Ratios
There is a significant increase in liabilities and decrease in stockholder equity of Nike. If compared to Adidas, its long term debt increased since 2015 but this outweighs the liabilities. Its long term debt is covered by its EBITDA. Since Adidas’ stockholder equity has increased, it would be better to invest on Adidas for this case.