Nike Inc (NKE)
Cash conversion cycle
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 103.08 | 96.38 | 106.68 | 121.81 | 101.79 |
| Days of sales outstanding (DSO) | days | 37.18 | 31.46 | 29.44 | 36.47 | 36.58 |
| Number of days of payables | days | 47.88 | 36.54 | 36.12 | 48.58 | 42.12 |
| Cash conversion cycle | days | 92.37 | 91.30 | 100.00 | 109.70 | 96.25 |
May 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 103.08 + 37.18 – 47.88
= 92.37
The cash conversion cycle (CCC) for Nike Inc. demonstrates fluctuations over the cited fiscal periods, reflecting shifts in inventory management, receivables collection, and payables practices.
In May 2021, the CCC stood at approximately 96.25 days, indicating that it took nearly three months for Nike to convert investments in inventory into cash flows from sales. Over the subsequent year, this cycle expanded to roughly 109.70 days by May 2022, implying a lengthening of the time span between inventory purchase and receipt of cash from customers. This increase could suggest either longer inventory turnover periods, extended receivables collection periods, or a combination of both factors.
By May 2023, the CCC slightly contracted to 100.00 days, signaling a partial improvement but still remaining above the 2021 level. The reduction here indicates a potential acceleration in cash inflows or improved efficiency in managing receivables and inventory, although it remains somewhat elevated relative to the 2021 benchmark.
The subsequent period, extending to May 2024, recorded a further decrease to approximately 91.30 days, representing a notable improvement in the cash collection process or inventory turnover cycle. This reduction in the CCC suggests enhanced operational efficiency, leading to faster cash conversion from sales activities. Interestingly, the cycle then experienced a slight uptick to approximately 92.37 days by May 2025, which could reflect minor changes in supply chain, credit policies, or inventory management practices.
Overall, from May 2021 to May 2025, Nike's CCC has shown a general trend towards normalization and short-term improvement after an initial increase. The observed fluctuations may reflect strategic adjustments in working capital management or responses to external market conditions, but the overall trend indicates a gradual return towards a more efficient cash cycle comparable to or slightly better than the initial period analyzed.
Peer comparison
May 31, 2025