Nike Inc (NKE)
Activity ratios
Short-term
Turnover ratios
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.05 | 5.36 | 4.75 | 5.49 | 4.65 |
| Receivables turnover | 11.63 | 12.45 | 10.01 | 10.01 | 13.60 |
| Payables turnover | 15.96 | 15.83 | 11.92 | 13.26 | 15.25 |
| Working capital turnover | 3.48 | 3.23 | 2.67 | 2.69 | 3.05 |
Nike Inc's activity ratios provide insights into how efficiently the company manages its inventory, receivables, payables, and working capital.
1. Inventory Turnover:
- Nike's inventory turnover has been consistently increasing from 4.65 in 2020 to 6.05 in 2024.
- This indicates that Nike is selling its inventory at a faster rate each year, which is a positive sign of efficient inventory management.
2. Receivables Turnover:
- Nike's receivables turnover fluctuated over the five-year period, with a peak at 13.60 in 2020 and a low of 10.01 in 2022 and 2023.
- A higher receivables turnover implies that Nike is collecting its receivables more quickly, which is beneficial for its cash flow.
3. Payables Turnover:
- Nike's payables turnover has shown variability, with the highest at 15.96 in 2024 and the lowest at 11.92 in 2022.
- A higher payables turnover indicates that Nike is paying its suppliers in a timelier manner, which could help in maintaining good relationships with suppliers.
4. Working Capital Turnover:
- Nike's working capital turnover has been gradually increasing over the years from 2.69 in 2021 to 3.48 in 2024.
- A higher working capital turnover ratio suggests that Nike is generating more sales revenue per dollar of working capital invested, reflecting efficiency in its operations.
Overall, Nike Inc's activity ratios demonstrate improvements in inventory management efficiency, variable trends in receivables turnover, fluctuations in payables turnover, and an increasing trend in working capital turnover, indicating overall positive performance in managing its assets and liabilities efficiently.
Average number of days
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 60.33 | 68.11 | 76.77 | 66.53 | 78.42 |
| Days of sales outstanding (DSO) | days | 31.38 | 29.32 | 36.45 | 36.46 | 26.84 |
| Number of days of payables | days | 22.87 | 23.06 | 30.61 | 27.53 | 23.93 |
Nike Inc's activity ratios indicate efficiency in managing its inventory, receivables, and payables over the past five years.
The Days of Inventory on Hand (DOH) have shown a decreasing trend from 78.42 days in 2020 to 60.33 days in 2024, indicating that the company has been more efficient in managing its inventory levels. This signifies that Nike has been able to turn over its inventory faster in recent years, which is positive for its working capital management.
The Days of Sales Outstanding (DSO) have fluctuated over the years but have generally remained within a reasonable range. The decrease in DSO from 36.46 days in 2021 to 31.38 days in 2024 suggests that Nike has been able to collect its receivables more quickly, improving its cash flow and liquidity position.
The Number of Days of Payables have also shown fluctuations over the years but have generally remained relatively stable. The decrease in payables days from 30.61 days in 2022 to 22.87 days in 2024 indicates that Nike has been able to manage its payables more effectively, potentially improving its relationships with suppliers.
Overall, Nike's activity ratios suggest that the company has been successful in optimizing its working capital management and improving efficiency in its operations over the past five years.
See also:
Nike Inc Short-term (Operating) Activity Ratios
Long-term
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.30 | 10.12 | 9.75 | 9.11 | 7.68 |
| Total asset turnover | 1.35 | 1.37 | 1.16 | 1.18 | 1.19 |
The fixed asset turnover ratio for Nike Inc has shown a consistent increase over the past five years, reaching 10.30 in 2024 from 7.68 in 2020. This indicates that the company has been generating more revenue from its fixed assets each year, reflecting efficient utilization of its long-term assets.
On the other hand, the total asset turnover ratio has fluctuated slightly over the same period, with a peak of 1.37 in 2023 and a low of 1.16 in 2022. The slight variation in total asset turnover suggests that Nike has been effectively managing its total assets to generate revenue, despite some fluctuations.
Overall, the increasing trend in fixed asset turnover coupled with relatively stable total asset turnover indicates that Nike Inc has been successful in optimizing the usage of its long-term assets to generate sales over the years. This efficiency in asset utilization is a positive sign of the company's operational effectiveness and management of its resources.