Nike Inc (NKE)
Return on equity (ROE)
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 5,700,000 | 5,070,000 | 6,046,000 | 5,727,000 | 2,539,000 |
| Total stockholders’ equity | US$ in thousands | 14,430,000 | 14,004,000 | 15,281,000 | 12,767,000 | 8,055,000 |
| ROE | 39.50% | 36.20% | 39.57% | 44.86% | 31.52% |
May 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $5,700,000K ÷ $14,430,000K
= 39.50%
Nike Inc's return on equity (ROE) has shown a positive trend over the past five years, increasing from 31.52% in May 2020 to 39.50% in May 2024. This indicates that the company has been effectively utilizing its shareholders' equity to generate profit. The ROE of 39.50% in 2024 suggests that for every dollar of equity invested by shareholders, Nike generated $0.395 in net income.
The consistent improvement in ROE signifies that Nike has been efficiently managing its assets and liabilities to enhance profitability. However, it is essential to also consider industry benchmarks and peer comparisons to thoroughly assess Nike's performance in utilizing shareholder equity. Overall, Nike's increasing ROE trend reflects positively on the company's financial health and efficient utilization of resources.
Peer comparison
May 31, 2024