Nike Inc (NKE)
Liquidity ratios
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.40 | 2.72 | 2.63 | 2.72 | 2.48 |
| Quick ratio | 1.51 | 1.60 | 1.65 | 1.85 | 1.39 |
| Cash ratio | 1.09 | 1.15 | 1.21 | 1.39 | 1.06 |
Nike Inc's liquidity ratios show a consistent trend over the past five years, reflecting the company's ability to meet its short-term financial obligations. The current ratio has fluctuated slightly, ranging from 2.40 to 2.72, with a current value of 2.40 as of May 31, 2024. This indicates that Nike had $2.40 in current assets for every dollar of current liabilities, highlighting a solid liquidity position to cover short-term obligations.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also displays stability over the years, ranging from 1.39 to 1.85. As of May 31, 2024, the quick ratio stands at 1.51, implying that Nike had $1.51 in liquid assets to cover each dollar of current liabilities. This suggests the company can meet its short-term obligations without relying on selling inventory.
Furthermore, the cash ratio, which is the most conservative measure of liquidity, reflects Nike's ability to cover its current liabilities with cash and cash equivalents. The cash ratio has varied between 1.06 and 1.39, with the latest value as of May 31, 2024, at 1.09. This indicates that Nike had $1.09 in cash and cash equivalents for every dollar of current liabilities, highlighting a strong ability to meet short-term obligations using its readily available liquid assets.
Overall, Nike Inc's liquidity ratios demonstrate a consistent and healthy liquidity position, providing assurance of its ability to meet short-term financial obligations efficiently.
See also:
Additional liquidity measure
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 68.83 | 74.37 | 82.60 | 75.47 | 81.34 |
The cash conversion cycle for Nike Inc has shown some fluctuations over the past five years. In May 2020, the cash conversion cycle was at 81.34 days, which decreased to 75.47 days in May 2021, then increased to 82.60 days in May 2022, and further improved to 74.37 days in May 2023. The most recent data as of May 31, 2024, indicates a further reduction to 68.83 days.
Overall, Nike Inc has been able to optimize its cash conversion cycle efficiency over the years, with a decrease in the number of days it takes to convert its investment in resources into cash flows. This trend suggests that the company has been managing its inventory, accounts receivable, and accounts payable more effectively, thereby enhancing its liquidity position and potentially improving its overall financial performance.