Nike Inc (NKE)
Return on total capital
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 5,868,000 | 5,915,000 | 6,675,000 | 6,937,000 | 3,115,000 |
| Long-term debt | US$ in thousands | 7,903,000 | 8,927,000 | 8,920,000 | 9,413,000 | 9,406,000 |
| Total stockholders’ equity | US$ in thousands | 14,430,000 | 14,004,000 | 15,281,000 | 12,767,000 | 8,055,000 |
| Return on total capital | 26.28% | 25.79% | 27.58% | 31.28% | 17.84% |
May 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,868,000K ÷ ($7,903,000K + $14,430,000K)
= 26.28%
Nike Inc's return on total capital has shown a fluctuating trend over the past five years, ranging from 17.84% in FY2020 to 31.28% in FY2021. The ratio decreased slightly to 27.58% in FY2022 before increasing again to 25.79% in FY2023 and reaching 26.28% in FY2024.
A return on total capital above 20% indicates that Nike Inc is efficiently utilizing its capital to generate profits for its stakeholders. Despite some fluctuations, the company has generally maintained a healthy return on total capital, reflecting its ability to generate substantial returns relative to its total invested capital. Investors and analysts may view this trend positively as it indicates the company's ability to efficiently deploy its resources for profitability. Further analysis would be needed to understand the specific factors driving these changes in the return on total capital over the years.
Peer comparison
May 31, 2024