Project on investment decision

8/6/2019 Project on investment decision

1/26

PROJECT

ON

BY

For

Submitted By:

NITISH KUMAR

KIRAN KUMARI

KOMAL RANJAN

PREETIKA RACHNA

2nd SEMESTER PRIYADARSHANI

RAKESH ANMOL TUTI


2/26

CCOONNTTEENNTT::

yyAACCKKNNOOWWLLEEDDGGEEMMEENNTT

yy CCEERRTTIIFFIICCAATTEE

yyIINNTTRROODDUUCCTTIIOONNyyHHIISSTTOORRYY

yy CCOOMMPPAANNYY SSPPLLIITT

yy TTAAPPIIEE AAFFFFAAIIRRyy CCOORRPPOORRAATTEEIINNFFOORRMMAATTIIOONN

yyAAddiiddaassAAGGy INTERESTING FACT ABOUT ADIDAS

yyNNUUMMEERRIICCAALLEEXXAAMMPPLLEE

yyBBAALLAANNCCEE SSHHEEEETT

yy CCOONNCCLLUUSSIIOONNyyBBIIBBLLIIOOGGRRAAPPHHYY


3/26

AACCKKNNOOWWLLEEDDGGEEMMEENNTT

MMOOVVEEWWIITTHHTTHHEEGGRROOUUPP

WWOORRKKBBEECCOOMMEEEEAASSIIEERR

MMOOVVEEAALLOONNEE

WWOORRKKBBEECCOOMMEESSTTOOUUGGHHEERR

WWEE,, TTHHEE SSTTUUDDEENNTTSS IINNVVOOLLVVEEDD IINN TTHHIISS AASSSSIIGGNNMMEENNTT,,

OOWWEE AA DDEEBBTT OOFF GGRRAATTIITTUUDDEE TTOO OOUURR FFIINNAANNCCIIAALL

MMAANNAAGGEEMMIINNTT FFAACCUULLTTYY MMRR.. RRAAJJUU KKUUMMAARR

DDAASS FFOORR PPRROOVVIIDDIINNGG UUSS SSUUCCHH AA LLEEAARRNNIINNGG AANNDDEEXXCCIITTIINNGG AASSSSIIGGNNMMEENNTT OONN IINNVVEESSTTMMEENNTT

DDEECCIISSIIOONNBBYYNNPPVV&& IIRRRR..WWEE AALLSSOO WWAANNTT TTOO AACCKKNNOOWWLLEEDDGGEE HHOOWW MMUUCCHH WWEE

HHAAVVEE LLEEAARRNNEEDD FFRROOMM WWOORRKKIINNGG TTOOGGEETTHHEERR IINN AA

GGRROOUUPP..

TTHHAANNKKYYOOUU


4/26

CERTIFICATE

THE PROJECT ENTERED IN THIS FILE HAVE BEEN

SATISFACTORILY PERFORMED BYNITISH KUMAR,

KIRAN KUMARI, KOMAL RANJAN, PREETIKARACHNA, PRIYADARSHINI KUMARI, AND

RAKESH ANMOL TUTI PURSUING BBA 1ST

YEAR

FROM CENTRAL UNIVERSITY OF JHARKHAND

DURING THE ACADEMIC YEAR2010-2015.

MARKS OBTAINED-

CO-ORDINATOR SIGN SUBJECT

FACULTY

C.NAGAPAWAN R.K.DAS

REMARKS:


5/26

INTRODUCTION

Adidas AG is a German sports apparel manufacturer and

parent company of the Adidas Group, which consists of the

Reebok sportswear company, golf company (includingAshworth), and Rockport. Besides sports footwear, the

company also produces other products such as bags, shirts,

watches, eyewear and other sports and clothing-related goods.

The company is the largest sportswear manufacturer in

Europe and the second biggest sportswear manufacturer in the

world, after its American rival Nike.

Adidas was founded in 1948 by Adolf "Adi" Dassler,following the split ofGebrder Dassler Schuhfabrikbetween

him and his older brother, Rudolf. Rudolf later establishedPuma, which was the early rival of Adidas. Registered in

1949, Adidas is currently based in Herzogenaurach, Germany,

along with Puma.

The company's clothing and shoe designs typically feature

three parallel bars, and the same motif is incorporated intoAdidas's current official logo. The "Three Stripes" were

bought from the Finnish sport company Karhu Sports in the

1951.[4][5] The company revenue for 2009 was listed at 10.38

billion and the 2008 figure at 10.80 billion.


6/26

HISTORY

Adolf "Adi" Dassler started to produce hisown sports shoes in his mother's wash

kitchen in Herzogenaurach, Bavaria, after

his return from World War I. In 1924, his brother Rudolf

"Rudi" Dassler joined the business which became Gebrder

Dassler Schuhfabrik( Dassler Brothers Shoe Factory) and

prospered. The pair started the venture in their mother's

laundry, but at the time, electricity supplies in the town wereunreliable, and the brothers sometimes had to use pedal power

from a stationary bicycle to run their equipment.

By the 1936 Summer Olympics, Adi Dassler drove from

Bavaria on one of the world's first motorways to the Olympic

village with a suitcase full of spikes and persuaded U.S.

sprinter Jesse Owens to use them, the first sponsorship for an

African American. Following Owens's haul of four goldmedals, his success cemented the good reputation of Dassler

shoes among the world's most famous sportsmen. Letters from

around the world landed on the brothers' desks, and the

trainers of other national teams were all interested in their

shoes. Business boomed and the Dasslers were selling

200,000 pairs of shoes each year before World War II.

Late in World War II, the shoe factory shifted to production of

the Panzerschreck anti-tank weapon


7/26

Company split

Both brothers joined the Nazi Party, but Rudolf

was slightly closer to the party. During the

war, a growing rift between the pair reached a

breaking point after an Allied bomb attack in

1943 when Adi and his wife climbed into a

bomb shelter that Rudolf and his family were

already in: "The dirty bastards are back again," Adi said,

apparently referring to the Allied war planes, but Rudolf wasconvinced his brother meant him and his family. After Rudolf

was later picked up by American soldiers and accused of

being a member of the Waffen SS, he was convinced that his

brother had turned him in.

The brothers split up in 1947, with

y Rudi forming a new firm that he called Ruda

from Rudolf Dassler, later rebranded Puma,

y and Adi forming a company formally registered

as adidas AG (with lower case lettering) on 18

August 1949. The acronymAll Day I Dream About

Sport, although sometimes considered the origin

of the adidas name, was applied retroactively,

which makes it a backronym. The name is actually

a portmanteau formed from "Adi" (a nickname forAdolf) and "Das" (from "Dassler").


8/26

The Tapie affair

Bernard Tapie, a former French businessman who onceowned Adidas but has since relinquished his controlover the company due to debt

After a period of trouble following the death of AdolfDassler's son Horst Dassler in 1987, the company wasbought in 1989 by French industrialist Bernard Tapie,for 1.6 billion (now 243.918 million), which Tapieborrowed. Tapie was at the time a famous specialist ofrescuing bankrupt companies, an expertise on which hebuilt his fortune.

Tapie decided to move production offshore to Asia. He

also hired Madonna for promotion. He sent,from Christchurch, New Zealand, a shoe salesrepresentative to Germany and met Adolf Dassler'sdescendants (Amelia Randall Dassler and Bella BeckDassler) and was sent back with a few items to promotethe company there.

In 1992, unable to pay the loan interest, Tapie mandated

the Crdit Lyonnais bank to sell Adidas, and the banksubsequently converted the outstanding debt owed

into equity of the enterprise, which was unusual as per

the prevalent French banking practice. Apparently,

the state-owned


9/26


10/26

Corporate information

Current executive board

y CEO Adidas-group: Herbert Hainer

y Finance Adidas-group: Robin J. Stalker

y CEO Adidas brand: Erich Stamminger

y Global Operations Adidas-group: Glenn S.

BennettFormer management

y CEO (19932002): Robert Louis-Dreyfus.

Financial information

Financial data in millions of euros

Year 2006 2007 2008 2009 2010

Sales 10,084 10,299 10,799 10,381 11,990

EBITDA 1,078 1,165 1,280 780 1,159

Net results 483 551 642 245 567

Net debt 2,231 1,766 2,189 917 221


11/26

AAddiiddaassAA

yyppee AAkkttiieennggeesseellllsscchhaaftt

rraaddeeddaass FFWWBB::AADD ,, iinnkk hheeeettss::AADDDD

nndduussttrryy CCllootthhiinnggaannddccoonnssuummeerrggooooddss mmaannuuffaaccttuurree

FFoouunnddeedd 11992244 aass eebbrrddeerr DDaasssslleerr cchhuuhhffaabbrriikk

((rreeggiisstteerreeddiinn 11994499))[[11]]

FFoouunnddeerr((ss)) AAddoollffDDaasssslleerr

eeaaddqquuaarrtteerrss eerrzzooggeennaauurraacchh,, eerrmmaannyy

AArreeaa sseerrvveedd WWoorrllddwwiiddee

KKeeyyppeeooppllee eerrbbeerrtt aaiinneerr((CCEE ))RRoobbiinn ttaallkkeerr((CCFF ))

EErriicchh ttaammmmiinnggeerr((CCEE ,, AAddiiddaass BBrraanndd))

ggoorr aannddaauu ((CChhaaiirrmmaann oofftthheessuuppeerrvviissoorryy bbooaarrdd))

rroodduuccttss FFoooottwweeaarr,, ssppoorrttsswweeaarr,,ssppoorrttss eeqquuiippmmeenntt,, ttooiilleettrriieess

RReevveennuuee 1111..9999 bbiilllliioonn ((22001100))[[22]]

ppeerraattiinngg

iinnccoommee

889944 mmiilllliioonn ((22001100))[[22]]

rroofiitt 556677mmiilllliioonn ((22001100))[[22]]

oottaallaasssseettss 1100..6622 bbiilllliioonn ((eenndd22001100))[[22]]

oottaalleeqquuiittyy 44..661166bbiilllliioonn ((eenndd22001100))[[22]]


12/26

EEmmppllooyyeeeess 4422,,554400 ((eenndd22001100))[[22]]

WWeebbssiittee aaddiiddaass--ggrroouupp..ccoomm


13/26


14/26

to implement newmarketingcampaigns that

boosted

o sluggish sales. e's the cousin of actress Juliaouis-Dreyfusof "Seinfeld" fame. ediedon July, 00 , at theageof .

Reebok Acquisition

o With permission from the European ommission,Adidas acquired rival sportswear maker eebokfor an estimated $ . billion in early 00 .ombined, the two entities represented almost

$ billion inrevenueat the time.

Fun Fact

o ip hop group unDMC recorded the song "MyAdidas" for the album " aising ell," which wasreleased in . Sample lyrics include the line" ow the Adidas I possess for one man is rare,myself, homeboy, got 50 pair."

Famous Ad PitchesCelebritieswhohaveendorsed Adidasproducts in

ads include tennisplayers ArthurAsheand Anna


15/26

o Kournikova, soccer star David Beckham andbasketball starKobe Bryant.

y

Better SoccerCoachingwww.bettersoccercoaching.com/Advice

ree Soccer Coaching Drills, Skills Delivered toyouweekly. ree

y Shop ouse Of ollandwww.shopfatal.com

Spring/Summer 0 onlinenow Past seasons to

0% off

y he KolkataOutletwww. OUPO .sosasta.com/Shoes

et Shoes & Accessoires for 0% Off in Kolkata.Join the roup

y bk Speed Shoes @ swww.BagIt oday.com

Buy eebok Speed Shoes worth worth s 5for s only


16/26

SSttoocckkDDaattaa:: RReecceennttSSttoocckkPPeerrffoorrmmaannccee::

CCuurrrreenntt PPrriiccee ((44//2299//22001111)):: 3377..3399

((FFiigguurreess iinn UU..SS.. DDoollllaarrss))

11 WWeeeekk 44..66%% 1133 WWeeeekkss1177..77%%

44 WWeeeekkss2200..00%% 5522 WWeeeekkss2288..00%%

aaddiiddaass AAGG KKeeyyDDaattaa::

TTiicckkeerr:: AADDDDYYYY CCoouunnttrryy:: GGEERRMMAANNYY

EExxcchhaannggeess:: FFRRAA OOTTCC MMaajjoorrIInndduussttrryy:: AAppppaarreell&& TTeexxttiilleess

SSuubb IInndduussttrryy::DDiivveerrssiiffiieedd AAppppaarreell

MMffrrss..

22001100SSaalleess

1155,,882277,,003399,,880000

((YYeeaarr EEnnddiinngg JJaann

22001111))..

EEmmppllooyyeeeess:: 4422,,554411

CCuurrrreennccyy:: UU..SS.. DDoollllaarrss MMaarrkkeettCCaapp:: 1155,,664455,,118866,,338899

FFiissccaallYYrrEEnnddss:: DDeecceemmbbeerrSShhaarreess

OOuuttssttaannddiinngg::441188,,443322,,337722

SShhaarree TTyyppee:: SSttaammmmaakkttiieeCClloosseellyy HHeelldd

SShhaarreess::88,,336688,,664488


17/26

Q. The cost of a project of adidas company is

Rs.25,000 and it generates cash inflows of Rs

9,000 ; 8,000; 7,000; 6,000; 5,000 through a

project of 5 years.A required rate of return is

assumed to be 10%.find out the NPV of the

project?

SOLUTION:

YEAR CASH

INFLOW (2)

DISCOUNTED

FACTOR AT10%(3)

PRESENT

VALUE OFCASH

INFLOW(2X3)

1

2

3

4

5

9,000

8,000

7,000

6,000

5,000

0.9091

0.8204

0.7513

0.6830

0.6209

8,181

6,608

5,257

4,098

3,100

27,244


18/26

NPV= Present value of cash inflow value of

cash outflow

= 27,244 25,000

=Rs 2,244

Comments: NPV of the project is positive, since

the present value of cash inflow of Rs 27,244 is

greater then present value of cash outflow of Rs

25,000. The project will be accepted for

investment.


19/26

Q.The cost of a project of adidas company is

Rs.32,400.It is expected to generate cash

inflows of Rs.16,000;Rs.14,000; and

Rs.12,000,through its 3 years, life

period.Calculate IRR of the project.

SOLUTION :

Calculation of IRR with TRIAL AND ERROR METHOD .

Let us try with 20%discounting factor.(Using table ofPRESENT VALUE OF ONE RUPEES)

YEAR CASH

INFLOW

(2)

DISCOUNTED

FACTOR AT

20%(3)

PRESENT

VALUE OF

CASH

INFLOW(2X3)

1

2

3

16,000

14,000

12,000

0.833

0.694

0.579

13,328

9,716

6,948

29,692

LLeettssuussttrryywwiitthh 1144%% ddiissccoouunnttiinnggffaaccttoorr


20/26

YEAR CASH

INFLOW (2)

DISCOUNTED

FACTOR AT

15%(3)

PRESENT

VALUE OF

CASH

INFLOW(2X3)

11

22

33

1166,,000000

1144,,000000

1122,,000000

00..887700

00..775566

00..665588

1133,,992200

1100,,558844

77,,889966

3322,,440000

There fore IRR is 15%


21/26

BALANCE SHEETView: Annual Data | Quarterly Data All numbers in thousands

Period EndingSep 30,

2010

Jun 30,

2010

Mar 31,

2010

Dec 31,

2009Assets

Current Assets

Cash And Cash Equivalents 571,000 594,000 388,000 775,000

Short Term Investments 328,000 401,000 302,000 58,000

Net Receivables 2,228,000 2,090,000 2,063,000 1,602,000

Inventory 1,926,000 2,049,000 1,680,000 1,471,000

Other Current Assets 470,000 507,000 478,000 296,000

Total Current Assets 5,523,000 5,641,000 4,911,000 4,485,000

Long Term Investments 153,000 217,000 166,000 107,000

Property Plant and Equipment - - - -

Goodwill 1,521,000 1,610,000 1,530,000 1,478,000

Intangible Assets - - - -

Accumulated Amortization - - - -

Other Assets - - - -

Deferred Long Term Asset Charges 473,000 463,000 428,000 412,000

Total Assets 10,105,000 10,608,000 9,531,000 8,875,000

Liabilities

Current Liabilities

Accounts Payable 1,313,000 1,464,000 1,133,000 1,166,000Short/Current Long Term Debt 1,632,000 1,774,000 1,840,000 1,782,000

Other Current Liabilities 1,080,000 1,023,000 902,000 899,000

Total Current Liabilities 3,474,000 3,602,000 3,014,000 2,836,000

Long Term Debt 1,363,000 1,482,000 1,533,000 1,579,000

Other Liabilities - - - -

Deferred Long Term LiabilityCharges

- - - -

Minority Interest - - - -

Negative Goodwill - - - -

Total Liabilities 5,611,000 5,879,000 5,277,000 5,104,000

Stockholders' Equity

Misc Stocks Options Warrants - - - -

Redeemable Preferred Stock - - - -

Preferred Stock - - - -

Common Stock 209,000 209,000 209,000 931,000

Retained Earnings 3,837,000 3,572,000 3,518,000 3,350,000


22/26

Treasury Stock 448,000 948,000 527,000 (510,000)

Capital Surplus - - - 2,000

Other Stockholder Equity - - - -

Total Stockholder Equity - - - -

Net Tangible Assets - - - -

Currency in EUR.


23/26

CONCLUSION

INVESTMENT DECISION THOUGH TAKEN BY

INDIVIDUAL CONCERN IS OF NATIONAL

IMPORTANCE BECAUSE IT DETERMINES

EMPLOYMENT, ECONOMICS ACTIVITIES AND

ECONOMICS GROWTH.

THE LONG TERM INVESTMENT DECISIONS ARE DIFFICULT TO BE TAKEN BECAUSE:-

y DECISION EXTENDS TO A SERIES OF

YEARS BEYOUND THE CURRENT

ACCOUNTING PERIOD

y UNCERTAINITIES OF FUTURE

y HIGHER DEGREE OF RISK

AT LAST WE WANT TO CONCLUDE THAT WE,

THE STUDENTS INVOLVED IN THIS

ASSIGNMENT, HAVE PUT OUR FULL EFFORT IN

MAKING THIS ASSIGNMENT SUCCESSFUL.


24/26

BIBLIOGRAPHY

FOLLOWING BOOKS AND WEBSITES WERE

TAKEN AS REFERENCE S WHILE WORKING

ON THE ASSIGNMENT ON INVESTMENT

DECISION BY NPV & IRR

y WWW.GOOGLE.COMy WWW.WIKIPEDIA.COM

y FINANCIAL MANAGEMENT-SASHI

GUPTA,R.K SHARMA

y FINANCIAL MANAGEMENT-I.M. PANDEY


25/26


26/26

Documents

Project on investment decision