Nike Inc (NKE)

Activity ratios

Short-term

Turnover ratios

	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019
Inventory turnover	6.10	5.95	5.70	5.25	5.36	4.99	4.58	4.23	4.75	5.16	6.02	5.81	5.49	5.13	5.67	5.07	4.65	6.22	5.73	5.97
Receivables turnover	11.62	11.40	10.78	10.84	12.40	11.22	9.03	9.51	10.01	12.22	12.35	10.63	9.99	10.49	10.30	9.78	13.56	9.21	8.50	10.55
Payables turnover	16.10	19.66	16.79	16.67	15.83	16.62	15.21	12.13	11.92	14.33	14.00	18.22	13.26	15.21	16.04	17.15	15.25	16.25	13.53	12.83
Working capital turnover	3.48	3.28	3.30	3.26	3.21	3.07	2.85	2.63	2.67	2.58	2.53	2.55	2.68	2.43	2.59	2.80	3.04	5.52	5.02	6.02

Based on the activity ratios provided for Nike Inc, we can draw several insights into the company's operational efficiency and management of its working capital:

1. Inventory turnover: Nike's inventory turnover has shown consistent performance over the periods analyzed, ranging between 4.23 and 6.10. This indicates that Nike is effectively managing its inventory levels and converting its inventory into sales. A higher inventory turnover ratio implies that the company is efficiently selling its products and minimizing excess inventory holding costs.

2. Receivables turnover: Nike's receivables turnover has varied, with a range of 8.50 to 13.56. A higher receivables turnover ratio suggests that Nike is efficiently collecting its accounts receivables and converting credit sales into cash quickly. It indicates effective credit management and potential low credit risk exposure.

3. Payables turnover: Nike's payables turnover has fluctuated over the periods, with a range of 11.92 to 19.66. A higher payables turnover ratio indicates that Nike is taking longer to pay its suppliers, which can be a favorable strategy to manage cash flow and working capital effectively. However, significant fluctuations in this ratio may indicate changes in payment terms with suppliers.

4. Working capital turnover: Nike's working capital turnover has ranged between 2.43 and 6.02, showing variations in the efficiency of converting working capital into sales. A higher working capital turnover ratio suggests that Nike is generating more revenue with less investment in working capital, which is a positive indicator of operational efficiency.

Overall, Nike's activity ratios reflect a mix of strong operational efficiency in inventory and receivables management, as well as effective working capital utilization. However, fluctuations in payables turnover may warrant further investigation into changes in supplier relationships or payment policies impacting cash flow management.

Average number of days

		May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019
Days of inventory on hand (DOH)	days	59.80	61.31	64.04	69.55	68.11	73.10	79.67	86.22	76.77	70.79	60.68	62.86	66.53	71.18	64.33	71.98	78.42	58.72	63.66	61.12
Days of sales outstanding (DSO)	days	31.42	32.01	33.85	33.66	29.44	32.53	40.40	38.39	36.48	29.86	29.55	34.33	36.53	34.80	35.45	37.30	26.91	39.62	42.96	34.58
Number of days of payables	days	22.67	18.57	21.74	21.89	23.06	21.96	24.00	30.08	30.61	25.47	26.07	20.03	27.53	24.00	22.75	21.29	23.93	22.46	26.98	28.45

Days of Inventory on Hand (DOH) for Nike Inc have shown a fluctuating trend over the past few years, ranging from a low of 58.72 days to a high of 86.22 days. The company has generally been able to manage its inventory efficiently, with a downward trend in recent periods indicating improved inventory turnover.

Days of Sales Outstanding (DSO) have varied over time, ranging from 26.91 days to 42.96 days. Lower DSO values indicate more efficient collections from customers, which is a positive sign for Nike Inc's cash flow management. The fluctuation in DSO may be influenced by sales seasonality and credit policies.

The Number of Days of Payables for Nike Inc has also shown variability, with values ranging from 18.57 days to 30.61 days. A higher number of days of payables suggests that the company is taking longer to pay its suppliers, which may indicate a strategy to manage cash flow or negotiate favorable credit terms.

Overall, Nike Inc's activity ratios suggest a mix of efficiency in managing inventory and collections, as well as strategic management of payables to optimize cash flow. Monitoring these ratios can provide insights into the company's working capital management and operational efficiency.

Long-term

	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019
Fixed asset turnover	10.29	10.15	10.01	10.08	10.08	10.25	10.12	9.87	9.75	9.73	9.62	9.48	9.09	7.76	7.71	7.51	7.66	8.62	8.72	10.65
Total asset turnover	1.35	1.38	1.39	1.40	1.36	1.32	1.24	1.15	1.16	1.21	1.19	1.22	1.18	1.06	1.10	1.12	1.19	1.57	1.53	1.87

Nike Inc's long-term activity ratios show a consistent and strong performance in utilizing its fixed assets efficiently over the years. The fixed asset turnover ratio has ranged between 7.51 to 10.29 over the past several periods, indicating that the company generates sales in relation to its investment in fixed assets. This suggests that Nike is effectively using its fixed assets, such as manufacturing facilities and equipment, to generate revenue.

Moreover, the total asset turnover ratio has also been relatively stable, fluctuating between 1.06 to 1.87 during the same period. This ratio reflects Nike's overall ability to generate sales in relation to its total assets, including both fixed and current assets. The consistently high total asset turnover ratio indicates Nike's efficient use of its assets to generate revenue and points towards effective management of both fixed and current assets.

Overall, Nike Inc's long-term activity ratios demonstrate strong operational efficiency and effective asset utilization, highlighting the company's ability to generate revenue from its investment in both fixed and total assets.