Nike Inc (NKE)
Cash conversion cycle
| 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 |
| Cash conversion cycle | days | 68.54 | 74.75 | 76.14 | 81.32 | 74.49 | 83.67 | 96.06 | 94.52 | 82.63 | 75.18 | 64.16 | 77.16 | 75.54 | 81.98 | 77.03 | 88.00 | 81.41 | 75.88 | 79.64 | 67.25 |
May 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.80 + 31.42 – 22.67
= 68.54
The cash conversion cycle of Nike Inc has shown fluctuations over the past few years. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Nike's cash conversion cycle has ranged from a low of 64.16 days to a high of 96.06 days over the past 20 periods. A shorter cash conversion cycle is generally preferred as it indicates that the company is able to quickly convert its investments into cash, which can improve liquidity and efficiency.
From the data provided, it is observed that Nike's cash conversion cycle was relatively stable, averaging around 75 days. However, there were some periods where the cycle extended beyond the average, indicating potential inefficiencies in managing working capital.
Analyzing trends in the cash conversion cycle can provide insights into Nike's inventory management, accounts receivable collection, and accounts payable management. A decreasing trend in the cycle may suggest improved efficiency in operations, while an increasing trend may signal potential liquidity issues or operational challenges.
Overall, monitoring the cash conversion cycle can help stakeholders assess Nike's operational efficiency and working capital management strategies over time.
Peer comparison
May 31, 2024