Nike Inc (NKE)
Activity ratios
Short-term
Turnover ratios
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.54 | 3.79 | 3.42 | 3.00 | 3.59 |
| Receivables turnover | 9.82 | 11.60 | 12.40 | 10.01 | 9.98 |
| Payables turnover | 7.62 | 9.99 | 10.11 | 7.51 | 8.67 |
| Working capital turnover | 3.62 | 3.47 | 3.21 | 2.67 | 2.68 |
The analysis of Nike Inc.'s activity ratios over the specified period provides insights into the company's operational efficiency and asset management.
Inventory Turnover: This ratio measures how often inventory is sold and replaced during a period. The data indicates a decline from 3.59 times in May 2021 to 3.00 times in May 2022, suggesting a slowdown in inventory turnover. However, there is an upward trend thereafter, with the ratio increasing to 3.42 times in May 2023, 3.79 times in May 2024, and slightly decreasing to 3.54 times in May 2025. The improvement post-2022 reflects potentially better inventory management and quicker liquidation of stock, although the ratio remains below the 2021 level.
Receivables Turnover: This ratio assesses how efficiently the company collects its accounts receivable. It increased from 9.98 times in May 2021 to 10.01 times in May 2022, indicating stable collection efficiency. A significant rise to 12.40 times in May 2023 suggests improved receivables collection, potentially leading to better cash flow. The ratio experienced a slight decrease to 11.60 times in May 2024, followed by a further decline to 9.82 times in May 2025, approaching the 2021 level, which may imply a slight loosening or elongation of receivable collection periods.
Payables Turnover: This ratio reflects how quickly the company pays off its suppliers. The ratio decreased from 8.67 times in May 2021 to 7.51 times in May 2022, indicating a longer period to pay suppliers. It then rose substantially to 10.11 times in May 2023, suggesting more prompt payments, followed by a marginal decrease to 9.99 times in May 2024 and a further decline to 7.62 times in May 2025. The fluctuation indicates variable supplier payment practices, with a notable peak in 2023 that aligns with improved operational liquidity or strategic payment policies.
Working Capital Turnover: This ratio measures how effectively the company utilizes working capital to generate sales. The data shows a slight decrease from 2.68 in May 2021 to 2.67 in May 2022, indicating stability. An upward trend follows, reaching 3.21 in May 2023, 3.47 in May 2024, and 3.62 in May 2025, demonstrating improved efficiency in using working capital to generate revenue over time.
Overall, Nike’s activity ratios exhibit fluctuations that reflect changes in inventory management, receivables collection, supplier payments, and utilization of working capital. The improvements in inventory turnover and working capital turnover suggest enhanced operational efficiency, while variations in receivables and payables turnover may reflect strategic adjustments in credit policies and supplier relations.
Average number of days
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 103.08 | 96.38 | 106.68 | 121.81 | 101.79 |
| Days of sales outstanding (DSO) | days | 37.18 | 31.46 | 29.44 | 36.47 | 36.58 |
| Number of days of payables | days | 47.88 | 36.54 | 36.12 | 48.58 | 42.12 |
The activity ratios for Nike Inc., encompassing Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, reveal several trends over the analyzed periods from May 2021 to May 2025.
Days of Inventory on Hand (DOH):
There was an initial increase in inventory holding time from 101.79 days in May 2021 to a peak of 121.81 days in May 2022. This suggests a period of slower inventory turnover, potentially indicating excess inventory buildup or strategic stockpiling. Subsequently, a significant reduction occurred, bringing DOH down to 106.68 days in May 2023 and further decreasing to 96.38 days in May 2024. The slight uptick to 103.08 days in May 2025 could imply a minor shift back towards longer inventory holding periods, yet the overall trend reflects improved inventory management with shorter holding times by 2024 relative to 2022.
Days of Sales Outstanding (DSO):
The DSO remained relatively stable around 36.5 days in May 2021 and May 2022, indicating consistent receivable collection periods. A notable decline occurred by May 2023, reducing to 29.44 days, which suggests an enhancement in collection efficiency or changes in credit terms. However, this was followed by a slight increase to 31.46 days in May 2024 and further to 37.18 days in May 2025, implying a modest elongation in receivables collection periods but remaining within a relatively efficient range.
Number of Days of Payables:
The payables period showed variability, extending from 42.12 days in May 2021 to a peak of 48.58 days in May 2022, indicating the company was delaying payments longer during this period. A decrease to 36.12 days in May 2023 suggests a tightening of payment terms or improved cash management. This shorter payables period persisted in May 2024 at 36.54 days, but an increase to 47.88 days in May 2025 indicates a renewed tendency to delay payments, possibly reflecting strategic liquidity management or negotiations for extended credit terms with suppliers.
Overall Analysis:
Nike Inc.'s activity ratios illustrate a cycle of inventory accumulation and subsequent acceleration of inventory turnover, with improved efficiency noted in 2024. The company demonstrated stable receivable collection efficiency early on, with a slight relaxation towards the end of the period. The payables management fluctuated, with periods of both extending and shortening payment durations, indicating flexibility in managing supplier payments. Collectively, these trends suggest efforts to optimize working capital management, balancing inventory, receivables, and payables to support operational and financial objectives.
See also:
Long-term
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 6.40 | 9.75 | 5.56 |
| Total asset turnover | 1.27 | 1.35 | 1.36 | 1.16 | 1.18 |
The analysis of Nike Inc.'s long-term activity ratios reveals insights into the company's efficiency in utilizing its fixed assets and total assets over the specified period.
Fixed Asset Turnover Ratio:
- The ratio increased from 5.56 in fiscal year 2021 to 9.75 in 2022, indicating a substantial improvement in the company's ability to generate sales from its fixed assets during that period. This suggests enhanced asset utilization efficiency, possibly driven by operational improvements or strategic asset management.
- In 2023, the ratio declined to 6.40, representing a reduction in fixed asset efficiency relative to the previous year. Despite this decrease, the ratio remains significantly higher than the 2021 level, implying that Nike continued to effectively leverage its fixed assets, albeit with less intensity than in 2022.
- Data for 2024 and 2025 are unavailable or not reported, preventing further trend analysis for these years.
Total Asset Turnover Ratio:
- The ratio remained relatively stable between 2021 and 2022, with a slight decrease from 1.18 to 1.16, indicating consistent overall asset utilization efficiency.
- A notable increase to 1.36 in 2023 signifies improved efficiency in using total assets to generate sales, possibly reflecting strategic investments or operational efficiencies.
- The ratio slightly decreases again to 1.35 in 2024 but remains higher than the 2021 and 2022 levels, reinforcing the trend of enhanced overall asset utilization.
- The projected ratio for 2025 is 1.27, which suggests a modest decline from 2023 and 2024 but still remains above pre-2023 levels.
Overall, Nike's fixed asset turnover experienced a peak in 2022 followed by a decline in 2023, indicating a period of heightened asset productivity that somewhat stabilized thereafter. The total asset turnover demonstrated a generally improving trend through 2023 and 2024, reflecting effective management of the company's total assets in generating sales.
These ratios collectively suggest that Nike has been able to optimize its asset base effectively, with notable improvements in overall asset utilization particularly evident in 2023. Continued performance will depend on maintaining or enhancing this efficiency amidst market and operational dynamics.