Nike Inc (NKE)

Days of Sales Outstanding (DSO) is a measure of the average number of days it takes for a company to collect its accounts receivable. A lower DSO indicates that a company is collecting payments from its customers more quickly, which can be indicative of effective credit and collection policies or a high-quality customer base.

Looking at the trend of Nike Inc.'s DSO over the past five years, we can see fluctuations in the number of days it takes the company to collect its accounts receivable. The DSO for May 31, 2023, stands at 29.44 days, reflecting an improvement from the previous year's 36.47 days.

The decrease in DSO from 2022 to 2023 suggests that Nike has been more efficient in collecting payments from its customers over the past year. A decrease in DSO may indicate that the company has tightened its credit policies, improved collection procedures, or perhaps has a better-quality customer base who pay their invoices more promptly.

Comparing the DSO figures with previous years, we observe that the DSO had also improved in 2020, with only 26.83 days, compared to 36.58 days in 2021 and 39.86 days in 2019. This indicates that there have been periods in the past where Nike's accounts receivable turnover was more efficient, followed by a minor setback in 2021 before significant improvement in 2022 and 2023.

It's important to consider the industry standards and the company's historical trends when analyzing DSO. While the company's decrease in DSO is a positive sign, it's essential to consider any potential impacts on sales growth, credit policies, or changes in customer base that may have contributed to this trend.

Overall, the decreasing trend in Nike Inc.'s DSO from 2021 to 2023 suggests an improvement in the company's ability to collect payments from its customers in a timely manner, which can positively impact its cash flow and overall financial health.

Peer comparison

May 31, 2023

See also:

Nike Inc Average Receivable Collection Period