Nike Inc (NKE)
Inventory turnover
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 45,302,000 | 40,035,000 | 37,601,000 | 34,288,000 | 34,345,000 |
| Inventory | US$ in thousands | 8,454,000 | 8,420,000 | 6,854,000 | 7,367,000 | 5,622,000 |
| Inventory turnover | 5.36 | 4.75 | 5.49 | 4.65 | 6.11 |
May 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $45,302,000K ÷ $8,454,000K
= 5.36
The inventory turnover ratio measures how effectively a company manages its inventory by calculating the number of times the inventory is sold and replaced over a specific period. A higher inventory turnover ratio indicates efficient inventory management.
Nike's inventory turnover has fluctuated over the past five years, with values ranging from 2.87 to 3.85. In 2023, Nike's inventory turnover ratio stood at 3.42, indicating that the company sold and replaced its inventory approximately 3.42 times during the year.
The increase in inventory turnover from 2020 to 2021 indicates improved efficiency in managing inventory. However, the slight decrease in 2022 followed by another increase in 2023 suggests some variability in the company's inventory management practices.
Comparing Nike's inventory turnover to industry benchmarks can provide further insight into the company's performance. Additionally, analyzing the trend of inventory turnover over a longer period can help identify patterns and potential areas for improvement in Nike's inventory management.
Peer comparison
May 31, 2023