Assume that Nike Inc. (NKE) is expanding globally. One way to expand globally is to buy shares of other companies, while other way is to open up new branches. But both options are not risk free.
How important is it for the financial managers of Nike Inc. to use economic variables in identifying long term financial goals?
Are there any major techniques/tools that the financial managers of Nike Inc. can use for forecasting future directions in the stock market and in the economy as a whole?
Importance of Use of Economic Variables for Finance Managers in Identifying Long Term Financial Goals:
Economic variables help someone understand how a certain region or country performs in terms of its Gross Domestic Product, economic recession and even employment. By using economic variables in identifying long term financial goals, financial managers are able to measure the aggregate output of the Growth Domestic Product. By this, the financial managers will have sufficient knowledge on how a country is performing economically and how to predict its future trends. Gross Domestic Product measures the value of all final goods and services produced within a country in a year. With this, it would be easy to know or understand how goods produced in a country fare and how the product intake is. Through the economic variables, they are able to understand how the exchange rates change within an economy and how the country's per capita growth is, as well as its effects to companies selling their products within. Another importance is that since trends within a country affect the finances of a company, they would use also use the average house income and population poverty line in a country to be able to more fully understand their targets. Having to ...
The solution discusses the economic variables for finance manages.