MemorandumDate: September 6th, 2011To: Mark G. Parker, CEO NikeFrom: Subject: Nike in better Financial position then SketchersI was asked to conduct a comparative financial analysis on Nike. Nike, as compared to Sketchers,is in a much better financial position in the marketplace due to their sheer earnings. Nike broughtin $2.1 billion in 2011 as compared to Sketchers who only brought in $500 million. My rationalefor selecting Sketchers (SKX) to compare to Nike (NKE) is simple: both make quality brand name sneakers that millions of Americans wear on a daily basis.The Numbers Say it AllAfter comparing these two companies I can derive that investors are expecting higher returns from Nike and more growth from Sketchers since their P/E ratio is almost double that of Nike’s. However, this doesn’t give us the big picture. The big picture is derived from sales, revenues, netincome, and EPS; all of which Nike dominates. Table 1.P/E Ratio EPS Quick RatioNike18.82 4.4 2.17Sketchers34.31 1.68 2.95As we can see from the chart, Nike’s earnings per share dominate sketchers by three fold. That means investors are making more money in Nike stock as compared to Sketchers stock. Sketchers P/E ratio is higher than Nike’s but this is just inflated due to its small size and growth estimates. Nike’s P/E ratio is higher than industry averaege and it is one of the biggest companies in the industry. They have bought in solid reveues to the company each year. .$87.56 $86.37 $86.55$00$25$50$75$100Intra-Day 6 Month 1 Year NKE SKXFigure 1.Due to extremely volatile conditions in the market today. Nike was down about 2% from $90 to $86.37 on the 6-month, but up almost 22% from $74.25 to $86.55 on the 1-year. Sketchers on theother hand was down 5% on the 6-month and even worse on the 1-year that is down 13%. This again shows Nike’s dominance in the marketplace, to be able to hang on during rough economies and still bring in strong profits for their shareholders. If you have any questions or concerns, I can be reached by e-mail at: