Question

Which income statement item is particularly not showing a smooth trend in the past 5 years and is the driver of the low net income for Nike for fiscal year 2018?

a) Cost of Goods Sold

b) Research and Development Expenses

c) Selling, General, and Administrative Expenses

d) Net Sales

Answer 1

The disruption in Nike's income statement is likely found in the Selling, General, and Administrative Expenses category, which, if irregular in fiscal year 2018, would have resulted in the low net income for that year.

Step-by-step explanation:

The income statement item that is not showing a smooth trend over the past 5 years and is the driver of the low net income for Nike for the fiscal year 2018 can be identified by examining Nike's annual financial reports for consistency in growth or decline. If the data for the fiscal year 2018 indicates an irregularity for Nike in Selling, General, and Administrative Expenses, that would likely be the reason for the low net income, as these expenses can greatly impact profitability.