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stated: “…But I am willing to tell you that it can be a complex case in which we can doubt about sensitivity analysis done by Kimi Ford (portfolio manager) too. Because her assumptions such as Revenue Growth Rate, COGS / Sales,

S &A / Sales, Current Assets / Sales, and Current Liability / Sales have been adopted from previous income statements and balance sheets from 1995 to 2001. Perhaps, we can take new assumptions.”

As we know, the most crucial thing to bear in mind for a true financial analysis is to reach to the accurate and reasonable assumptions. We usually use from five years of annual reports to gather data from income statements and balance sheets as the sources of our assumptions. This is only an internal analysis and maybe it will be enough for small size companies. But to analyze the big size companies, we should not only have an internal analysis but also external analysis such as PEST and Porter’s Five Forces to find out competitive advantages. In this case, I have only examined the influence of the economic indicators included in Macroeconomic as driving forces but we as well as know to take a good external analysis, we should analyze the impacts of Political issues, Society-Culture, Technology and prepare a SWOT analysis compatible with value chain (value- added) and Porter’s five forces. This is only a sample of external – internal analysis for Case of Nike, Inc. in which I would like to expand a Monte Carlo Analysis on this case. How can we do our analysis?

In this article, I am willing to tell you the method of Monte Carlo Analysis done on the case of Nike, Inc.: Cost of Capital step by step as follows:

Ø At the first, we should make a spreadsheet just like EXHIBIT 2 (Discounted Cash Flow Analysis) made by Kimi Ford. This spreadsheet will be our basic platform of the simulation model (Monte Carlo).

Ø We should have so many scenarios on assumptions such as Revenue Growth rate (%), COGS / Sales (%), S & A /...