1. Annual Report
Adidas
Brendan Rochelle
Section 004

2. Executive Summary
The Adidas-Solomon AG have very strong numbers when it comes to overall cash flow, marketability, and sales Adidas is one of the better companies in the world. As for investing, it would be wise to have this company in a diversified portfolio because the earnings are not high but they are definitely stable. Adidas is a good strong company with a long history of quality as well as a history of keeping up with the youth market and inventing new technology everyday.

3. Introduction Herbert Hainer Herzogenaurach, Germany December 31, 2005
Adidas is a sport oriented company offering equipment for many different sporting areas
Europe

4. Audit Report Summary Independent Auditors Dr. Erle Wirtschaftsprüfer
Gebele Wirtschaftsprüfer
The Audit report for Adidas is given the thumbs for meeting any and all criteria for the audit. The independent auditors state that the company is in good standing and are currently at the top of their industry.

5. Stock Market Dealings 37.79 € 33.38 - 44.00 1.30 October 11, 2006
I would add this Adidas into a diversified portfolio. They do well on an average basis and are always coming up with new technology.

6. Industry War Room
“2005 was another successful year for the Adidas-Salomon AG share. Our share increased 35% compared to the 2004 year end level.” (Adidas) Adidas was planning a buyback of shares but instead used free cash to purchase Reebok. This will only add to sales and keeps stockholders stocks going up. “Over the last ten years, our share has gained 312%. It thereby developed significantly better than both the DAX-30, which increased 140%, and the MSCI World Index, which rose 86% during the same period.” (Adidas) All this adds up to Adidas being a very solid and strong company to put your money behind.

7. Income Statement
The Adidas income statement is set up as a multi step income statement.
% change
Gross profit ,197, ,813, %
Income from Ops , , %
Net Income , , %
All % changes in the Adidas company from 2004 to 2005 increased. Adidas seems only to be getting stronger.

8. Balance Sheet 2005 Assets= Liabilities + Stockholders Equity
5,750,241= 3,037, ,712,313
2004
4,433,884 = 2,870, ,563,695
Adidas has only been showing how strong they are becoming. Equity alone increased by 73%.

9. Statement of Cash Flows
Cash from operations are almost double the net income for years 2004 and 2005.
In 2004 Adidas spent money on investments. In 2005 the investments paid off and Adidas’s investment side are very knowledgeable.
Adidas mainly concentrated on the short term investments.
Cash has increased over the last two years for Adidas.

10. Accounting Procedures
Recognition of Revenues
Sales are recorded net of returns, discounts, allowances and sales taxes when title passes based on the terms of the sale.
Cash and Cash Equivalents
Cash and cash equivalents represent cash and short-term bank deposits with maturities of three months and less.

11. Accounting Procedures Cont’.
Inventories
Merchandise and finished goods are valued at the lowest price possible.
Property and Equipment
All property and equipment totals are minus the Accumulated depreciation.

12. Financial Analysis Liquidity Ratios 2005 2004
Working Capital ,576, ,336,081
Current Ratio
Receivable Turnover
Avg. days sales uncltd
Inventory Turnover
Avg. days inv. on hand

13. Financial Analysis Profitability Ratios 2005 2004
Profit Margin % %
Asset Turnover
Return on Assets % 7.2%
Return on Equity % %
Adidas’ numbers and percentages look very enticing. The profitability and liquidity are great but to invest it might be wise to choose a company with a higher earning ratio.

14. Financial Analysis Solvency Ratios 2005 2004 Debt to Equity 1.13 1.9
Debt to Equity
Adidas has been strong enough to keep control of their company. With a 1.13 debt to equity ratio Adidas is the controller in the finance and operations portion. Not their creditors.

15. Market Strength Ratios
Financial Analysis
Market Strength Ratios
Price/Earnings per share
Dividend Yield
Adidas shows stable financial statements but buying stock in Adidas won’t get you all of the bang for your buck.