Nike Inc (NKE)
Return on assets (ROA)
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 5,070,000 | 6,046,000 | 5,727,000 | 2,539,000 | 4,029,000 |
| Total assets | US$ in thousands | 37,531,000 | 40,321,000 | 37,740,000 | 31,342,000 | 23,717,000 |
| ROA | 13.51% | 14.99% | 15.17% | 8.10% | 16.99% |
May 31, 2023 calculation
ROA = Net income ÷ Total assets
= $5,070,000K ÷ $37,531,000K
= 13.51%
Nike's return on assets (ROA) measures the company's ability to generate profit from its assets. The trend in Nike's ROA over the past five years shows some fluctuations. In 2019, the ROA stood at a high of 16.99%, indicating that Nike was efficient in generating profit from its assets. However, in 2020, the ROA decreased to 8.10%, reflecting a decline in profitability relative to its assets.
The subsequent years, 2021 and 2022, saw a slight recovery in Nike's ROA to 15.17% and 14.99% respectively, showcasing an improvement in the company's ability to generate profit from its assets. However, the latest data as of May 31, 2023, indicates a further decrease in ROA to 13.51%.
This decline may signify a potential decrease in Nike's efficiency in utilizing its assets to generate earnings. It could be attributed to various factors such as increased operating expenses, changes in the capital structure, or a decrease in net income. It would be essential for investors and stakeholders to assess the reasons behind this decline in ROA to gauge the company's financial health and performance.
In conclusion, while Nike's ROA has experienced fluctuations over the past five years, the recent decline in ROA as of May 31, 2023, warrants further investigation to understand the factors impacting Nike's profitability and asset utilization.
Peer comparison
May 31, 2023