Nike Inc (NKE)
Debt-to-capital ratio
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 8,927,000 | 8,920,000 | 9,413,000 | 9,406,000 | 3,464,000 |
| Total stockholders’ equity | US$ in thousands | 14,004,000 | 15,281,000 | 12,767,000 | 8,055,000 | 9,040,000 |
| Debt-to-capital ratio | 0.39 | 0.37 | 0.42 | 0.54 | 0.28 |
May 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $8,927,000K ÷ ($8,927,000K + $14,004,000K)
= 0.39
The debt-to-capital ratio of Nike, Inc. has fluctuated over the past five years, indicating changes in the company's capital structure and financial leverage. In May 2023, the ratio stood at 0.39, a slight increase from the previous year. This suggests that the proportion of the company's capital financed by debt has increased marginally.
Comparing this to previous years, there was a noticeable decrease in the ratio from 2020 to 2021, followed by a significant increase in 2021. This indicates that there may have been a shift in the company's financing strategy or capital management during that period, possibly to fund expansion or new projects.
The ratio in 2023 appears to be within a reasonable range, indicating a balanced capital structure with a significant portion funded by equity. However, it is essential to monitor this ratio in the coming years to ensure that the company maintains a sustainable level of debt relative to its capital. Any substantial deviations from historical trends should be carefully evaluated to assess their potential impact on the company's financial risk and overall stability.
Peer comparison
May 31, 2023