Nike Inc (NKE)

Short-term

Turnover ratios

The analysis of Nike Inc.'s activity ratios reveals notable trends over the indicated periods, highlighting the company's operational efficiency in managing inventory, receivables, payables, and working capital.

Inventory Turnover:
The inventory turnover ratio exhibits a general upward trend from August 2020 through May 2023, increasing from 3.17 to 3.42, indicating an improvement in inventory management and faster conversion of inventory into sales. However, there is a decline observed from August 2023 (2.67) to November 2023 (2.92), followed by an upward movement reaching 3.72 in February 2024 and further growth to 3.79 in May 2024 before stabilizing around 3.34 to 3.56 through late 2024 and into May 2025. The fluctuation suggests periods of inventory build-up and clearance but generally signals improved inventory efficiency over the long term.

Receivables Turnover:
Receivables turnover ratios fluctuate within a relatively narrow range, indicating consistent credit collection practices. The ratio increased from 9.79 in August 2020 to a peak of 12.36 in November 2021, reflecting enhanced collection efficiency during that period. A subsequent decline to around 9.03 in November 2022 was observed, but the ratio again improved, reaching approximately 12.40 in May 2023. The ratios remain relatively stable afterward, oscillating between about 9.24 and 11.60, suggesting steady receivables management with periodic improvements in collection periods.

Payables Turnover:
This ratio demonstrates variability, with peaks reaching 12.28 in February 2024 and lows near 7.51 during May 2022. Such fluctuations indicate changes in payment policies or supplier negotiations, potentially reflecting efforts to extend payment terms or improve cash flow management. Despite these variations, the ratios tend to cluster between approximately 7.62 and 12.28, indicating that Nike adjusts its payables period strategically over time.

Working Capital Turnover:
The working capital turnover ratio shows a gradual upward trend from 2.80 in August 2020 to around 3.62 in May 2025, suggesting increasing efficiency in using working capital to generate sales. The steady rise points to improved operational management, with the ratio reflecting a better alignment between working capital and sales volume over the analyzed span.

Overall Summary:
Nike Inc.'s activity ratios portray a company that has progressively enhanced inventory management and receivables collection efficiency over the examined periods. Fluctuations in payables indicate strategic adjustments in supplier payments, while the steady increase in working capital turnover signifies improved overall operational productivity. These trends collectively suggest a focus on optimizing operational processes to support growth and maintain effective capital and liquidity management.

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Average number of days

The activity ratios for Nike Inc., as reflected by the provided data, demonstrate notable trends over the analyzed period, specifically concerning days of inventory on hand (DOH), days sales outstanding (DSO), and days payable.

Starting with the days of inventory on hand, Nike exhibits variability across the reporting periods. Initially, DOH decreased from approximately 115.30 days in August 2020 to about 96.74 days in August 2021, indicating an improvement in inventory management with faster inventory turnover. However, a subsequent rise is observed, peaking at approximately 136.95 days in August 2022, suggesting potential overstocking or slower inventory turnover during that period. Following this peak, the DOH declines again, reaching around 100.83 days in November 2023, reflecting a reduction in inventory levels and improved inventory efficiency. Nonetheless, slight fluctuations persist, with the latest data indicating a DOH of approximately 103.08 days in May 2025, which remains below the peak levels but higher than the early 2021 period.

Regarding days sales outstanding, Nike displays a generally stable trend with modest fluctuations. The DSO reduced from about 37.28 days in August 2020 to approximately 29.53 days in November 2021, indicating improvements in receivables collection efficiency. After a slight increase to around 40.41 days in November 2022, the DSO decreased again to approximately 29.44 days in May 2023, signaling effective receivables management. Subsequently, a rising trend resumes with DSO reaching about 39.51 days in November 2024 before modestly declining again to roughly 34.28 days in February 2025. Overall, Nike has been able to maintain relatively short receivables periods, reflecting efficient credit policies.

The days of payables showed considerable fluctuation. Early on, the payables period was around 34.10 days in August 2020, with some variability over the subsequent periods. In May 2022, days payables peaked at approximately 48.58 days, indicating a period of extended payment terms or deliberate delay in settlements. A subsequent decline brings the payables period back down to approximately 29.73 days in February 2024, suggesting more prompt supplier payments. However, the latest data reveals an increase again, reaching around 47.88 days in May 2025, implying a shift towards longer payment cycles.

Overall, Nike's activity ratios display a pattern of improving inventory and receivables management at various points, alongside fluctuations in payment practices. These trends reflect strategic adjustments in operational efficiency and liquidity management, aligning inventory turnover and receivables collection with broader business objectives.

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See also:

Nike Inc Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

The long-term activity ratios for Nike Inc, as reflected in the provided data, exhibit distinct trends over the analyzed periods.

The Fixed Asset Turnover ratio demonstrates significant fluctuation, with an overall upward movement during the period. It commenced at 7.51 as of August 31, 2020, and showed an increasing trend culminating in a notable peak of 10.25 on February 28, 2023. This sharp rise suggests an enhanced efficiency in utilizing fixed assets to generate sales, possibly due to asset restructuring, improved asset management, or increased sales volume relative to fixed assets. However, subsequent periods indicate a stabilization trend, with values slightly declining to around 6.37 by November 30, 2023. The data beyond this point are not available, precluding further analysis of longer-term trends.

The Total Asset Turnover ratio remained relatively stable, fluctuating within a narrow range. It started at 1.12 on August 31, 2020, and experienced minor fluctuations, reaching a high of 1.40 in August 31, 2023. The recent trend shows slight declines, with the ratio decreasing to 1.27 by May 31, 2025. This indicates a consistent, moderate utilization of total assets to generate sales, reflecting operational stability. The gradual decline post-2023 suggests possible increases in asset base that are not proportionally matched by sales growth or shifts toward more asset-intensive activities.

Overall, the analysis points to improved fixed asset efficiency, especially evident during early 2023, followed by stabilization. Meanwhile, the total asset turnover ratio indicates steady operational performance with marginal fluctuations, possibly reflecting strategic asset management and sales efficiency in Nike’s long-term activities.

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See also:

Nike Inc Long-term (Investment) Activity Ratios (Quarterly Data)