Nike Inc (NKE)
Financial leverage ratio
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 38,110,000 | 37,531,000 | 40,321,000 | 37,740,000 | 31,342,000 |
| Total stockholders’ equity | US$ in thousands | 14,430,000 | 14,004,000 | 15,281,000 | 12,767,000 | 8,055,000 |
| Financial leverage ratio | 2.64 | 2.68 | 2.64 | 2.96 | 3.89 |
May 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $38,110,000K ÷ $14,430,000K
= 2.64
The financial leverage ratio for Nike Inc has shown a fluctuating trend over the past five years. The ratio decreased from 3.89 in 2020 to 2.64 in 2022 before increasing to 2.96 in 2021 and then slightly decreasing again to 2.68 in 2023. In the most recent period, May 31, 2024, the financial leverage ratio stands at 2.64.
A financial leverage ratio above 1 indicates that a company relies more on debt than equity to finance its assets. Nike Inc's increasing financial leverage ratio from 2020 to 2021 and fluctuation between 2022 and 2023 may suggest variations in the company's capital structure and debt management strategies during these periods.
However, it is worth noting that a high financial leverage ratio can also signal higher financial risk due to increased debt obligations. Therefore, Nike Inc's management should continue to monitor and assess its capital structure to maintain a balanced level of leverage that supports its growth and financial stability.
Peer comparison
May 31, 2024