Financial evaluation
The financial performance front of Adidas AG is evaluated in three fiscal domains; the investment center, the profit center and the cost center. Strengthening investments by increasing the operating cash flows has seen the realization of impressive returns from virtually every Adidas AG product, coupled to the increase in operating cash flow is the accumulation of the operating savings to such stable levels as would secure the investment confidence of Adidas AG. These heightened investments spell the indispensable presence of Adidas in the sporting-wear market, which in spite of the substantial cost of production due to massive supplies and the sky rocketing marketing budget, is always characterized by high levels of returns (Catovic, 2010, p. 1).
Non-financial evaluation
The non-financial progress of Adidas AG is evaluated along the twin domains of foreign operating unit and the managers of the unit evaluation. As such, the management of Adidas AG has prioritized its operation strategy towards lifestyle branding; this has seen an increased involvement of the youth in sports, music, and technology, the management team of Adidas AG has also consented to Adidas-Reebok merger which is projected to display a sustainable competitive advantage at the regional and global level (Eli, 2005, p. 1). The foreign operating unit of Adidas AG on the other side of the coin has focused its attention on increasing the international command of Adidas in sport-wear by maintaining a steady supply of superior products in the global market (Balboul, 2010, p. 1).
Management control systems and national cultures
The management control systems and national culture forms another perspective from which the performance of Adidas is evaluated, under this domain the sensitivity of Adidas to such national concerns as gender inequalities are addressed, as such Adidas has integrated the design of women wear in its functions and the consequence of this is the active involvement of women in the sporting world which is a plus for the general welfare of the nation.
Why invest in Adidas AG?
Stock investors should consider Adidas AG as one of the most viable grounds of investment for it is one of the giant players in the production and supply of broad spectrum of sporting wear, with the 2009 statistics showing that Adidas enjoyed a great market advantage scooping 72.4% of the net sales. For instance, under the capital investment evaluation as listed in Exhibit 13.3; an investment with the payback period settlement one can invest a principal of $500,000 and the annual after-tax inflows would be of $100,000, the play back period being five years (Adidas Group, 2012, p. 1).
The Sarbanes-Oxley Act of 2002
Sarbanes-Oxley Act of 2002 is a bill that was enacted into law by President Gorge W. Bush which was aimed at developing checks and balances in the corporate world for a fair play ground in the public company accounting arena. It was aimed at reclaiming public trust in the corporate accounting procedures which was already marred with irregularities and high levels of accounting discrepancies. As such it was designed to befit the functions of restoring corporate and public auditing to high levels of professional integrity, responsibility, transparency and equity.
The impact of the law on the MNC Adidas AG
This legislation encompasses a broad spectrum of fresh ideas and does heighten the threshold operating standard of any public company, accounting entities and the corporate body of management. The law thus provides a fair playing ground which in spite of restricting the operating frontiers of Adidas AG, does bequeath it with an impressive competitive advantage over its competitors.
Reference List
Adidas Group. (2012). Investor Relations. Web.
Balboul, L. (2010). Adidas-Reebok Merger. Web.
Catovic, N. (2010). Managerial methods – Adidas AG research. Web.
Eli, K. (2005). With Adidas and Reebok Combined, Will Nike Still Crush the Competition. Web.