Question

Imagine that you have $10,000 to invest in either Walmart or Nike stock. Discuss which company you would invest in and also what you have based that decision on that can be found within the income statements they issue.

Answer 1

I would prefer to invest in NIKE stock only becouse of it's Brand Loyalty.

Walmart is around 72 years old company, operating in 28 countries.It's having 11,700 retail units under 65 banners with 23 lakh associates in all over the world.It offers customers the lower possible price in the market.This the most valuable aspect which permits WMT to survive for decades to come.

The biggest negativity of Walmart is Public Perception.It has been suffering from a problem of poor employee compensation on which WMT is changing their mindset and proposed to increase their amount of compensation.This will result in low profit as the labour cost will be increased.It's not a good sign for the Investors.Walmart alreaedy operates in thin market.If it wants to remain in the competition so they must have to make strategy of making the turnover higher as well as the profit.

NIKE is another US company which operates their business in 45 countries with having 700 outlets.It started it's business 54 years back as a distributor of Japanese shoes but later on they started manufacturing their own shoes.Now a days NIKE dominates shoe industry in all over the world.But NIKE's business is not limited to shoes,they have diversified their business to other sporting accessories & equipments.It had a revenue of $ 35.29B last year.It till has a plenty to grow.The speciality of NIKE shoes are it helps to jump higher . It's shoes will help you work harder & keep your body cooler.

Besides these all NIKE also facing a problem of Competition.Earlier NIKE's competitor was ADIDAS & REEBOK.But recently the main competitor is Under Armour (UA) which is a dangerous wild card holder.Both companies are making outstanding products using higher technology.The question is which company will be at the growth now.

Now it's time to analyse the factors from Income Statement & BS for both the companies :

(Amt.in Billion of US$)
Parameters	WMT	NIKE	Remarks
Revenue	500.34	35.29
Net Profit	9.86	1.8
Net Margin (%)	1.97	5.10	NIKE at favourable state
Operating Marin (%)	4.45	12.31	NIKE at favourable state
Debt-Equity Ratio (%)	57.75	35.64	NIKE at favourable state as it has lower D/E ratio
P/E Ratio (%)	25.31	30.87	NIKE at favourable state

[ Links of Financial Results :

For NIKE - https://finance.yahoo.com/quote/NKE/key-statistics?p=NKE

For Walmart - https://finance.yahoo.com/quote/WMT/key-statistics?p=WMT ]

Personally I believe that both the stocks are good to invest in but what makes me love about the NIKE over WMT is the Brand Loyalty as it enhancing it's business all over the world as well as the Financial Performance of NIKE explained above.So, I would invest $10,000 in Nike stock.