Nike Inc (NKE)
Cash ratio
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | US$ in thousands | 9,860,000 | 7,441,000 | 8,574,000 | 9,889,000 | 8,348,000 |
| Short-term investments | US$ in thousands | 1,722,000 | 3,234,000 | 4,423,000 | 3,587,000 | 439,000 |
| Total current liabilities | US$ in thousands | 10,593,000 | 9,256,000 | 10,730,000 | 9,674,000 | 8,284,000 |
| Cash ratio | 1.09 | 1.15 | 1.21 | 1.39 | 1.06 |
May 31, 2024 calculation
Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($9,860,000K
+ $1,722,000K)
÷ $10,593,000K
= 1.09
The cash ratio measures a company's ability to cover its short-term liabilities using its cash and cash equivalents. A higher cash ratio indicates a stronger ability to meet short-term obligations.
Nike Inc's cash ratio has fluctuated over the past five years, ranging from 1.06 to 1.39. In general, the company has maintained a healthy cash ratio above 1, signaling that it has sufficient cash on hand to cover its current liabilities.
The slight decline in the cash ratio from 1.39 in 2021 to 1.09 in 2024 may indicate a decrease in the proportion of cash and cash equivalents relative to current liabilities. However, it is important to note that a ratio above 1 still indicates that Nike Inc has enough liquid assets to meet its short-term obligations.
Overall, Nike Inc's cash ratio suggests that the company is in a favorable position to address its immediate financial obligations, providing a cushion against potential liquidity challenges.
Peer comparison
May 31, 2024