Reebok
Mock Presentation
&
Analysis Tools
Presented by
Investment Club Officers
Overview
News
Important Events:

1996: The push into performance sneakers also translated into large increases in
expenses, resulting in decreasing net income, from $254.5 million in 1994 to
$164.8 million in 1995 to $139 million in 1996.

1998: Reebok took a restructuring charge of $23.7 million in the first quarter of
1998 for costs related to eliminating management layers, combining business
units, and cutting its workforce by 500, or 10 percent.

1999: Declining sales prompt Reebok to lay off 10% of its global workforce.
Recent News:



2001: Clearly Canadian Beverage Corp. and Reebok jointly launch Reebok
Fitness Water
2001 Aug.: NBA grants Reebok a ten-year license to design, manufacture, and
market NBA licensed merchandise.
2002: Reebok secures a 10-year exclusive license from the National Football
League.
Du Pont Analysis
ROE
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
19.83 22.79 19.22 25.81 13.83 27.65 28.96 19.09 23.43 34.33
1998
4.87
1999 2000 2001 2002
3.41 15.27 16.19 16.80
Lev
ROC
1.28 1.20 1.16 1.22 1.21 1.18 1.22 1.33 2.07 3.03
15.49 18.92 16.50 21.12 11.42 23.41 23.80 14.40 11.32 11.32
2.52
1.93
2.29
1.49
1.89 1.59 1.50
8.07 10.19 11.18
0.78
2.48
0.62
2.40
3.03
2.66
NPM
Capital T/O
7.68
2.02
9.60
1.97
8.20
2.01
Return on equity =
(ROE)
8.60
2.46
3.81
3.00
8.05
2.91
8.11
2.93
5.17
2.78
4.30
2.63
4.19
2.70
3.59
2.84
Asset turnover * Net profit margin * leverage
(NPM)
(TATR)
1/(1-DR)
(Net profit/Equity) =
(Net profit/Sales) * (Sales/Total assets) * (Total assets/Equity)
4.31
2.59
Key Ratios
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2.79
3.88
3.50
2.42
2.75
2.84
2.65
3.09
2.84
2.53
2.22
1.99
2.51
2.88
2.78
Activity
Av Coll Prd
Inv T/O
56.48
3.70
56.61
3.71
57.50
3.99
54.49
4.08
50.91
4.13
55.22
3.57
55.08
3.40
54.47
3.30
57.58
3.56
57.75
4.05
61.11
3.70
58.86
3.74
53.58
4.29
49.22
4.91
46.98
5.05
Solvency
X Int Earnd
11.45
20.33
15.75
14.45
13.90
15.88
27.19
12.16
6.56
3.53
1.61
1.56
7.14
9.84
14.45
Liquidity
Current
Key Index Trends
Income Statement:
240
220
200
180
160
140
Sales
Gross Pft
120
100
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Key Index Trends
Balance Sheet:
1000
900
800
Excess Cash
Working Cap
L.T. Debt
700
600
500
400
300
200
100
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
EV/EBITDA
Reebok: 1.71
Nike: 13.24
ADIDAS: 41.01
The EV/EBITDA ratio shows that firms selling for a low EV/EBITDA
multiple compared to competitors are assumed to be undervalued.
This ratio relates the total market value of the firm to the EBITDA
We remove cash holdings because the interest income from cash is not
counted as a part of EBITDA. If we did not subtract the cash, the end result
would result in an overstatement of the EBITDA multiple.
Notes: In the cases of Reebok and Nike, the denominator was substituted for (income before
income taxes, minority interest and cumulative effect of the change in the accounting
principle + interest expense – interest income.)
Book Value of debt was substituted for market value in the case of debt and preferred stock. (if
preferred stock was applicable.)
EV / EBITDA
Market Value of equity- Cash + Market Value of Debt + Market Value of
Preferred Stock / (Sales-COGS-SGA)
ADIDAS: (1,081,359 x 82.3 ) – 75,956 +
3,179,452/ 2,245,383
(Sales-COGS-SGA) are from the income statement
MV of equity= Number of shares outstanding* the share price
Cash= found on balance sheet
MV (BV) of Debt= Balance sheet: Total Liabilities & equity- Total Value of Equity
MV of preferred stock= preferred stock price* shares out preferred stock
outstanding (if applicable)
Conclusion
Buy More!
Any Questions?
Analytical Tools

Du Pont Analysis

Index Analysis

Common Size Analysis

EV / EBITDA
Reebok Balance Sheet
($ millions, except share data)
Inv
Accs Rec
Other
Cash
Total C.A.
1988
302
276
36
99
714
1989
276
289
47
172
784
1990
367
391
44
227
1,030
1991
436
425
80
86
1,027
1992
434
418
103
105
1,060
1993
514
457
76
79
1,127
1994
625
532
96
84
1,337
1995
635
507
111
80
1,333
1996
545
591
105
222
1,463
1997
564
562
130
209
1,465
1998
535
518
129
180
1,362
1999
415
417
129
282
1,243
2000
394
424
139
269
1,225
2001
363
383
135
413
1,295
2002
400
422
150
642
1,614
PPE
Goodwill
Intangibles
Other F.A.
Total F.A.
74
1
265
11
351
106
0
261
15
382
111
0
255
7
374
146
0
245
12
403
127
0
103
55
285
131
0
94
40
265
165
0
96
51
312
192
0
64
62
319
185
0
70
68
323
157
0
66
68
291
173
0
69
137
378
178
0
69
74
321
142
0
64
32
238
134
31
45
38
248
135
23
44
45
247
Total Ass
1,064
1,166
1,403
1,430
1,345
1,392
1,649
1,652
1,786
1,756
1,740
1,564
1,463
1,543
1,861
S.T. Debt
Accs Pay
Other
Total C.L.
76
137
43
256
2
148
52
202
70
166
58
294
40
308
76
424
8
281
96
385
27
138
231
396
69
171
266
506
68
166
198
432
85
196
235
516
162
192
224
578
135
203
274
612
213
154
257
624
23
172
293
488
19
127
303
449
19
166
395
580
L.T. Debt
Other
Total L.T.
113
5
118
110
9
119
106
7
113
170
12
182
116
5
121
134
15
149
132
22
153
254
70
324
854
34
888
639
32
671
554
49
603
370
41
411
345
22
367
351
23
374
353
43
396
Com Eqty
691
845
997
824
839
847
991
895
382
507
524
529
608
720
885
Total L&E
1,064
1,166
1,403
1,430
1,345
1,392
1,649
1,652
1,786
1,756
1,740
1,564
1,463
1,543
1,861
Shares ('000)
(Bolded figures are weighted averages)
# Shares
113,767
114,176
114,654
Diluted # Sh. …
…
…
97,216
98,958
90,742
92,697
86,462
88,348
82,228
84,311
78,317
79,487
67,370
68,617
56,162
58,309
56,394
57,029
56,065
56,530
56,852
57,724
58,551
65,495
59,478
68,013
Source: SEC, Mergent Online
Reebok Balance Sheet
Capital Method
Excess Cash
2%
Inv
Accs Rec
Other
Cash
Total C.A.
1988 1989
64 136
1990
184
1991
31
1992
45
1993
21
1994
18
1995
11
1996
152
1997
136
1998
116
1999
224
2000
211
2001
353
2002
580 Excess Cash
302
276
36
36
650
276
289
47
36
648
367
391
44
43
846
436
434
514
625
635
545
564
535
415
394
425
418
457
532
507
591
562
518
417
424
80
103
76
96
111
105
130
129
129
139
55
60
58
66
70
70
73
64
58
57
996 1,015 1,106 1,319 1,322 1,311 1,329 1,246 1,019 1,014
363
400
383
422
135
150
60
63
941 1,034
Accs Pay
Other
Total C.L.
137
43
180
148
52
200
166
58
224
308
76
384
281
96
377
138
231
369
171
266
437
166
198
364
196
235
431
192
224
416
203
274
478
154
257
411
172
293
465
127
303
430
166 Accs Pay
395 Other
561 Total C.L.
Working Cap
470
448
622
612
638
736
883
958
880
913
769
608
548
511
473 Working Cap
PPE
Goodwill
Intangibles
Other F.A.
Total F.A.
74
1
265
11
351
106
0
261
15
382
111
0
255
7
374
146
0
245
12
403
127
0
103
55
285
131
0
94
40
265
165
0
96
51
312
192
0
64
62
319
185
0
70
68
323
157
0
66
68
291
173
0
69
137
378
178
0
69
74
321
142
0
64
32
238
134
31
45
38
248
135
23
44
45
247
Capital
884
966 1,180 1,046
968 1,022 1,213 1,287 1,355 1,340 1,262 1,153
Inv
Accs Rec
Other
Cash
Total C.A.
PPE
Goodwill
Intangibles
Other F.A.
Total F.A.
998 1,113 1,300 Capital
S.T. Debt
76
2
70
40
8
27
69
68
85
162
135
213
23
19
19 S.T. Debt
L.T. Debt
Other
Total L.T.
113
5
118
110
9
119
106
7
113
170
12
182
116
5
121
134
15
149
132
22
153
254
70
324
854
34
888
639
32
671
554
49
603
370
41
411
345
22
367
351
23
374
353 L.T. Debt
43 Other
396 Total L.T.
Total Liab
193
121
183
222
129
176
222
392
973
833
738
624
390
393
415 Total Liab
Com Eqty
691
845
997
824
839
847
991
895
382
507
524
529
608
720
885 Com Eqty
Capital
884
966 1,180 1,046
968 1,022 1,213 1,287 1,355 1,340 1,262 1,153
998 1,113 1,300 Capital
Reebok Income Stmt
($ millions, except per share data)
Sales
COS
Gross Pft
SG&A
Dep
Op Inc
Int
Non-op Inc
Tax Inc
Taxes
Net Inc
EPS
Dil. EPS
Div. PS
1988
1,785
1,118
667
410
9
248
22
4
230
93
137
1989
1,822
1,072
750
453
15
282
15
23
290
115
175
1.20
…
1.53
…
0.30
1990
2,159
1,282
877
556
21
300
20
15
295
118
177
1991
2,734
1,638
1,096
666
23
407
29
12
390
155
235
1992
3,022
1,798
1,224
807
28
389
20
-111
258
143
115
1993
2,893
1,694
1,199
769
35
395
25
2
372
139
233
1994
3,280
1,933
1,347
889
36
422
16
13
419
153
266
1995
3,481
2,079
1,402
999
38
365
25
-61
279
99
180
1996
3,479
2,101
1,378
1,066
43
269
42
7
234
84
150
1997
3,644
2,247
1,397
1,069
47
281
65
-51
165
12
153
1998
3,225
2,034
1,191
1,043
3
144
61
-46
37
12
25
1999
2,900
1,776
1,124
972
5
147
50
-69
28
10
18
2000
2,865
1,733
1,132
915
46
170
22
-12
136
49
87
2001
2,993
1,858
1,135
914
37
184
18
-11
156
48
108
2002
3,128
1,926
1,202
955
32
215
15
-6
195
61
135
2.37
1.24
1.23
0.30
2.53
2.53
0.30
3.09
3.02
0.30
2.10
2.07
0.30
2.06
2.03
0.23
2.41
2.32
0.00
0.42
0.42
0.00
0.2
0.20
0.00
1.42
1.40
0.00
1.75
1.66
0.00
2.12
1.97
0.00
1.54
…
0.30
Source: SEC, Mergent Online
…
0.30
0.30
Du Pont Analysis
ROE
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
19.83 22.79 19.22 25.81 13.83 27.65 28.96 19.09 23.43 34.33
1998
4.87
1999 2000 2001 2002
3.41 15.27 16.19 16.80
Lev
ROC
1.28 1.20 1.16 1.22 1.21 1.18 1.22 1.33 2.07 3.03
15.49 18.92 16.50 21.12 11.42 23.41 23.80 14.40 11.32 11.32
2.52
1.93
2.29
1.49
1.89 1.59 1.50
8.07 10.19 11.18
0.78
2.48
0.62
2.40
3.03
2.66
NPM
Capital T/O
7.68
2.02
9.60
1.97
8.20
2.01
Return on equity =
(ROE)
8.60
2.46
3.81
3.00
8.05
2.91
8.11
2.93
5.17
2.78
4.30
2.63
4.19
2.70
3.59
2.84
Asset turnover * Net profit margin * leverage
(NPM)
(TATR)
1/(1-DR)
(Net profit/Equity) =
(Net profit/Sales) * (Sales/Total assets) * (Total assets/Equity)
4.31
2.59
Reebok Balance Sheet: Index Analysis
1988
100
1989
213
1990
289
1991
49
1992
70
1993
34
1994
29
1995
17
1996
239
1997
214
1998
182
1999
352
2000
332
2001
555
Inv
Accs Rec
Other
Cash
Total C.A.
100
100
100
100
100
91
105
130
102
100
122
142
122
121
130
144
154
221
153
153
144
151
285
169
156
170
166
211
162
170
207
193
266
184
203
210
183
306
195
203
181
214
290
195
202
187
203
359
204
204
177
187
356
181
192
137
151
357
162
157
130
153
384
161
156
120
139
373
168
145
132
153
414
175
159
Accs Pay
Other
Total C.L.
100
100
100
108
121
111
121
134
124
225
176
213
205
223
209
101
536
205
124
617
242
121
460
202
143
545
239
140
519
231
148
636
265
112
596
228
125
680
258
93
703
239
121 Accs Pay
915 Other
311 Total C.L.
Working Cap
100
95
132
130
136
157
188
204
187
194
164
129
117
109
101 Working Cap
PPE
Goodwill
Intangibles
Other F.A.
Total F.A.
100
100
100
100
100
143
0
99
131
109
150
0
96
66
106
197
0
93
107
115
171
0
39
494
81
176
0
36
356
75
222
0
36
457
89
259
0
24
559
91
250
0
26
613
92
212
0
25
612
83
233
0
26
1226
108
240
0
26
665
92
191
0
24
285
68
181
3129
17
340
71
Capital
100
109
133
118
109
116
137
146
153
152
143
130
113
126
S.T. Debt
100
3
93
53
11
36
91
89
112
214
178
281
30
25
25 S.T. Debt
L.T. Debt
Other
Total L.T.
100
100
100
98
180
101
94
139
96
151
240
155
103
100
103
119
291
126
117
431
130
226
1404
276
758
680
755
567
640
570
492
971
512
329
822
350
306
441
312
312
452
318
314 L.T. Debt
859 Other
337 Total L.T.
Total Liab
100
63
95
115
67
91
115
203
503
431
382
323
202
203
215 Total Liab
Com Eqty
100
122
144
119
121
123
143
130
55
73
76
77
88
104
128 Com Eqty
Capital
100
109
133
118
110
116
137
146
153
152
143
130
113
126
147 Capital
Excess Cash
2002
911 Excess Cash
182
2343
17
405
70
Inv
Accs Rec
Other
Cash
Total C.A.
PPE
Goodwill
Intangibles
Other F.A.
Total F.A.
147 Capital
Reebok Income Stmt: Index Analysis
Sales
COS
Gross Pft
SG&A
Dep
Op Inc
Int
Non-op Inc
Tax Inc
Taxes
Net Inc
EPS
DPS
1988
100
100
100
100
100
100
100
100
100
100
100
1989
102
96
112
110
167
114
68
575
126
124
128
1990
121
115
131
136
233
121
91
375
128
127
129
1991
153
147
164
162
256
164
132
300
170
167
172
1992
169
161
184
197
311
157
91
-2775
112
154
84
1993
162
152
180
188
389
159
114
50
162
149
170
1994
184
173
202
217
400
170
73
325
182
165
194
1995
195
186
210
244
422
147
114
-1525
121
106
131
1996
195
188
207
260
478
108
191
175
102
90
109
1997
204
201
209
261
522
113
295
-1275
72
13
111
1998
181
182
178
254
38
58
276
-1156
16
13
18
1999
162
159
169
237
58
59
226
-1732
12
11
13
2000
161
155
170
223
513
69
101
-306
59
53
63
2001
168
166
170
223
407
74
80
-275
68
52
78
100
100
128
100
128
100
198
100
103
100
211
100
258
100
175
100
172
75
201
0
35
0
17
0
118
0
146
0
2002
175
172
180
233
356
87
66
-138
85
65
98
Sales
COS
Gross Pft
SG&A
Dep
Op Inc
Int
Non-op Inc
Tax Inc
Taxes
Net Inc
177 EPS
0 DPS
Reebok Balance Sheet: Common Size Analysis
1988
7
1989
14
1990
16
1991
3
1992
5
1993
2
1994
2
1995
1
1996
11
1997
10
1998
9
1999
19
2000
21
2001
32
Inv
Accs Rec
Other
Cash
Total C.A.
34
31
4
4
74
29
30
5
4
67
31
33
4
4
72
42
41
8
5
95
45
43
11
6
105
50
45
7
6
108
51
44
8
5
109
49
39
9
5
103
40
44
8
5
97
42
42
10
5
99
42
41
10
5
99
36
36
11
5
88
39
42
14
6
102
33
34
12
5
85
31
32
12
5
80
Accs Pay
Other
Total C.L.
16
5
20
15
5
21
14
5
19
29
7
37
29
10
39
14
23
36
14
22
36
13
15
28
14
17
32
14
17
31
16
22
38
13
22
36
17
29
47
11
27
39
13 Accs Pay
30 Other
43 Total C.L.
Working Cap
53
46
53
58
66
72
73
74
65
68
61
53
55
46
36 Working Cap
PPE
Goodwill
Intangibles
Other F.A.
Total F.A.
8
0
30
1
40
11
0
27
2
40
9
0
22
1
32
14
0
23
1
39
13
0
11
6
29
13
0
9
4
26
14
0
8
4
26
15
0
5
5
25
14
0
5
5
24
12
0
5
5
22
14
0
5
11
30
15
0
6
6
28
14
0
6
3
24
12
3
4
3
22
10
2
3
3
19
100
100
100
100
100
100
100
100
100
100
100
100
100
100
S.T. Debt
9
0
6
4
1
3
6
5
6
12
11
18
2
2
1 S.T. Debt
L.T. Debt
Other
Total L.T.
13
1
13
11
1
12
9
1
10
16
1
17
12
1
13
13
1
15
11
2
13
20
5
25
63
3
66
48
2
50
44
4
48
32
4
36
35
2
37
32
2
34
27 L.T. Debt
3 Other
30 Total L.T.
Total Liab
22
13
15
21
13
17
18
30
72
62
58
54
39
35
32 Total Liab
Com Eqty
78
87
85
79
87
83
82
70
28
38
42
46
61
65
68 Com Eqty
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Excess Cash
Capital
Capital
2002
45 Excess Cash
Inv
Accs Rec
Other
Cash
Total C.A.
PPE
Goodwill
Intangibles
Other F.A.
Total F.A.
100 Capital
100 Capital
Reebok Income Stmt: Common Size Analysis
Sales
COS
Gross Pft
SG&A
Dep
Op Inc
Int
Non-op Inc
Tax Inc
Taxes
Net Inc
1988
100.0
62.6
37.4
23.0
0.5
13.9
1.2
0.2
12.9
5.2
7.7
1989
100.0
58.8
41.2
24.9
0.8
15.5
0.8
1.3
15.9
6.3
9.6
1990
100.0
59.4
40.6
25.8
1.0
13.9
0.9
0.7
13.7
5.5
8.2
1991
100.0
59.9
40.1
24.4
0.8
14.9
1.1
0.4
14.3
5.7
8.6
1992
100.0
59.5
40.5
26.7
0.9
12.9
0.7
-3.7
8.5
4.7
3.8
1993
100.0
58.6
41.4
26.6
1.2
13.7
0.9
0.1
12.9
4.8
8.1
1994
100.0
58.9
41.1
27.1
1.1
12.9
0.5
0.4
12.8
4.7
8.1
1995
100.0
59.7
40.3
28.7
1.1
10.5
0.7
-1.8
8.0
2.8
5.2
1996
100.0
60.4
39.6
30.6
1.2
7.7
1.2
0.2
6.7
2.4
4.3
1997
100.0
61.7
38.3
29.3
1.3
7.7
1.8
-1.4
4.5
0.3
4.2
1998
100.0
63.1
36.9
32.4
0.1
4.5
1.9
-1.4
1.1
0.4
0.8
1999
100.0
61.2
38.8
33.5
0.2
5.1
1.7
-2.4
1.0
0.3
0.6
2000
100.0
60.5
39.5
31.9
1.6
5.9
0.8
-0.4
4.7
1.7
3.0
2001
100.0
62.1
37.9
30.5
1.2
6.2
0.6
-0.4
5.2
1.6
3.6
2002
100.0
61.6
38.4
30.5
1.0
6.9
0.5
-0.2
6.2
1.9
4.3
Reebok Ratio Analysis
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2.79
1.61
3.88
2.51
3.50
2.25
2.42
1.39
2.75
1.63
2.84
1.55
2.65
1.41
3.09
1.62
2.84
1.78
2.53
1.56
2.22
1.35
1.99
1.33
2.51
1.70
2.88
2.07
2.78
2.09
56.48
3.70
44.77
5.09
2.019
56.61
3.71
48.54
4.97
1.970
57.50
3.99
44.71
5.71
2.013
54.49
4.08
52.82
7.04
2.457
50.91
4.13
59.78
8.78
3.001
55.22
3.57
45.16
10.53
2.907
55.08
3.40
29.16
11.38
2.935
54.47
3.30
29.55
11.04
2.785
57.58
3.56
31.45
10.84
2.633
57.75
4.05
31.51
11.87
2.704
61.11
3.70
35.45
9.64
2.479
58.86
3.74
36.71
8.30
2.401
53.58
4.29
34.32
10.25
2.665
49.22
4.91
29.40
12.31
2.836
46.98
5.05
27.81
12.62
2.593
2.885
2.754
2.651
3.169
3.628
3.227
3.208
2.976
2.774
2.847
2.614
2.546
2.840
3.039
2.757
Solvency
Debt Ratio
Leverage
X Int Earnd
0.22
1.28
11.45
0.17
1.20
20.33
0.14
1.16
15.75
0.18
1.22
14.45
0.17
1.21
13.90
0.15
1.18
15.88
0.18
1.22
27.19
0.25
1.33
12.16
0.52
2.07
6.56
0.67
3.03
3.53
0.60
2.52
1.61
0.56
2.29
1.56
0.47
1.89
7.14
0.37
1.59
9.84
0.34
1.50
14.45
Profitability
OROA
ROC
ROE
NPM
GPM
28.06
15.50
19.83
7.68
37.37
30.49
18.92
22.79
9.60
41.16
27.97
16.50
19.22
8.20
40.62
36.58
21.12
25.81
8.60
40.09
38.63
11.42
13.83
3.81
40.50
39.69
23.41
27.65
8.05
41.44
37.76
23.80
28.96
8.11
41.07
29.20
14.40
19.09
5.17
40.28
20.33
11.32
23.43
4.30
39.60
20.82
11.32
34.33
4.19
38.33
11.06
1.93
4.87
0.78
36.92
12.17
1.49
3.41
0.62
38.77
15.83
8.07
15.27
3.03
39.50
17.48
10.19
16.19
3.59
37.92
17.86
11.18
16.80
4.31
38.43
Liquidity
Current
Acid Test
Activity
Av Coll Prd
Inv T/O
Av Pmt Prd
F.A.T.O.
Capital T/O
Capital T/O (w/o
Goodwill and Intag.)
EV / EBITDA
Market Value of equity- Cash + Market Value of Debt + Market Value of Preferred
Stock / (Sales-COGS-SGA)
Outcome