Nike Inc (NKE)
Payables 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 |
| Payables | US$ in thousands | 2,862,000 | 3,358,000 | 2,836,000 | 2,248,000 | 2,612,000 |
| Payables turnover | 15.83 | 11.92 | 13.26 | 15.25 | 13.15 |
May 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $45,302,000K ÷ $2,862,000K
= 15.83
The payables turnover ratio indicates the efficiency of Nike, Inc. in managing its accounts payable. A higher ratio generally represents favorable efficiency in paying off suppliers and managing short-term liabilities. The trend of Nike's payables turnover over the last five years shows some fluctuations.
In May 2023, Nike achieved a payables turnover ratio of 10.11, marking a notable increase from the previous year. This signifies an improvement in the company's ability to pay off its suppliers in a timely manner relative to its cost of goods sold. It suggests that Nike managed its trade payables more effectively during this period, potentially negotiating better payment terms with its suppliers.
Comparing this to the prior years, the payables turnover ratio in 2022 was 7.51, notably lower than 2023. This indicates that Nike took longer to pay its suppliers relative to the cost of goods sold, which may signal a less efficient management of trade payables. However, in 2021 and 2020, the payables turnover ratios of 8.67 and 9.41, respectively, reflect improvement in managing accounts payable compared to 2022, suggesting more effective management of supplier payments.
Notably, in 2019, the payables turnover ratio was 8.29, indicating moderate efficiency in managing payables. It was slightly lower than the ratios observed in the following years, suggesting that Nike's management of trade payables has shown improvement over time.
Overall, Nike's payables turnover ratio has demonstrated some variability over the past five years, with a notable increase in efficiency in 2023 compared to the prior year. This suggests that the company has been more efficient in managing its accounts payable in the most recent fiscal year, potentially benefiting from improved working capital management strategies or changes in its supplier payment practices.
Peer comparison
May 31, 2023