Nike Inc (NKE)
Liquidity 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.40 | 2.74 | 2.74 | 2.87 | 2.72 | 2.73 | 2.69 | 2.64 | 2.63 | 3.06 | 3.07 | 3.19 | 2.72 | 2.78 | 2.66 | 2.55 | 2.48 | 1.90 | 1.98 | 2.01 |
| Quick ratio | 1.51 | 1.67 | 1.63 | 1.60 | 1.60 | 1.60 | 1.57 | 1.54 | 1.65 | 1.96 | 2.13 | 2.18 | 1.85 | 1.82 | 1.75 | 1.54 | 1.39 | 0.92 | 1.00 | 1.03 |
| Cash ratio | 1.09 | 1.17 | 1.10 | 1.04 | 1.15 | 1.13 | 1.04 | 1.09 | 1.21 | 1.53 | 1.71 | 1.66 | 1.39 | 1.41 | 1.33 | 1.10 | 1.06 | 0.38 | 0.42 | 0.45 |
Nike Inc's liquidity ratios have shown fluctuating trends over the past few periods. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 2, indicating a healthy liquidity position. However, there was a slight dip in the current ratio in the most recent period, possibly indicating a decrease in short-term assets relative to liabilities.
The quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, has also been above 1, suggesting that Nike has an adequate ability to meet its short-term obligations without relying on inventory. Similar to the current ratio, the quick ratio has shown some variability but has generally remained at acceptable levels over the periods analyzed.
The cash ratio, which provides the most stringent measure of liquidity by only considering cash and cash equivalents, has displayed a similar pattern to the other ratios. While the cash ratio has generally been above 1, indicating that Nike holds sufficient liquid assets to cover its current liabilities, there have been fluctuations over the periods, possibly reflecting changes in the company's cash position.
Overall, Nike's liquidity ratios demonstrate a relatively strong liquidity position, with the company maintaining a healthy ability to meet its short-term obligations. However, the fluctuating trends in the ratios suggest that monitoring liquidity closely is important to ensure continued financial stability.
See also:
Nike Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of Nike Inc has shown some fluctuation over the past few periods. 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.
From February 2020 to August 2021, the cash conversion cycle of Nike Inc ranged from 67.25 days to 77.16 days, indicating relatively efficient management of inventory and receivables during this period. However, from November 2021 to May 2023, the cash conversion cycle increased significantly, peaking at 96.06 days in November 2022, which suggests potential issues in managing working capital effectively.
Despite the fluctuations, Nike Inc managed to improve its cash conversion cycle from November 2022 to May 2024, with the cycle decreasing from 96.06 days to 68.54 days. This improvement indicates better efficiency in managing the company's operating cycle and working capital.
It is important for Nike Inc to continue monitoring and managing its cash conversion cycle effectively to optimize its working capital management and ensure efficient use of resources to support the company's growth and profitability.