Nike Inc (NKE)
Return on total capital
| Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 4,927,000 | 5,475,000 | 5,916,000 | 6,311,000 | 5,986,000 | 6,062,000 | 5,824,000 | 5,915,000 | 6,162,000 | 6,379,000 | 6,246,000 | 6,675,000 | 7,120,000 | 7,169,000 | 7,295,000 | 6,937,000 | 4,186,000 | 3,698,000 | 3,338,000 | 3,115,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 14,007,000 | 14,037,000 | 13,944,000 | 14,430,000 | 14,226,000 | 14,146,000 | 13,971,000 | 14,004,000 | 14,531,000 | 15,272,000 | 15,822,000 | 15,281,000 | 14,809,000 | 14,924,000 | 14,343,000 | 12,767,000 | 11,931,000 | 10,640,000 | 9,224,000 | 8,055,000 |
| Return on total capital | 35.18% | 39.00% | 42.43% | 43.74% | 42.08% | 42.85% | 41.69% | 42.24% | 42.41% | 41.77% | 39.48% | 43.68% | 48.08% | 48.04% | 50.86% | 54.34% | 35.09% | 34.76% | 36.19% | 38.67% |
February 28, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $4,927,000K ÷ ($—K + $14,007,000K)
= 35.18%
The analysis of Nike Inc.'s return on total capital (ROTC) over the given periods reveals notable fluctuations and overarching trends. From May 31, 2020, to February 28, 2021, the ROTC demonstrated a declining pattern, decreasing from approximately 38.67% to around 35.09%, indicating a temporary reduction in the efficiency of capital utilization during this period. Subsequently, a significant upward movement was observed starting May 31, 2021, with the ROTC soaring to approximately 54.34%, representing a substantial improvement in the company's ability to generate returns relative to its total capital.
This elevated level was sustained throughout the subsequent quarters, with minor fluctuations, until peaking at around 50.86% on August 31, 2021. From late 2021 onwards, the ROTC experienced some volatility, notably declining to approximately 39.48% by August 31, 2022, before recovering slightly to around 41.77% by November 30, 2022, and stabilizing around 42% through early 2023.
The period from mid-2023 onward shows relative stability, with the ROTC remaining in the low 42% range, until a marked decline is observed in late 2024, where it falls to approximately 36.13% by November 30, 2024, and further diminishes to approximately 32.57% as of February 2025. This recent decline indicates a contraction in the company's effectiveness in generating profits from its total capital base, possibly reflective of operational challenges, market conditions, or strategic shifts.
Overall, Nike’s return on total capital has experienced considerable variability over the examined timeframe, characterized by periods of strong profitability and efficiency, followed by declines that suggest changes in operational performance or external economic factors. The data reflects a generally healthy but fluctuating ability to leverage total capital efficiently, with recent figures indicating a potential weakening trend that warrants further investigation into underlying causes.
Peer comparison
Feb 28, 2025