Nike Inc (NKE)
Interest coverage
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 6,311,000 | 5,915,000 | 6,675,000 | 6,937,000 |
| Interest expense | US$ in thousands | 107,000 | — | 286,000 | 292,000 | 289,000 |
| Interest coverage | 0.00 | — | 20.68 | 22.86 | 24.00 |
May 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $107,000K
= 0.00
The interest coverage ratio for Nike Inc. over the recent fiscal periods indicates a consistent capacity to meet interest obligations from operating earnings. As of May 31, 2021, the ratio stood at 24.00, suggesting that Nike's earnings before interest and taxes (EBIT) were 24 times greater than its interest expense, reflecting a strong coverage and low financial risk related to interest payments.
In the following year, May 31, 2022, the ratio slightly declined to 22.86, indicating a modest decrease in EBIT relative to interest expenses, yet maintaining a robust buffer that supports the company's ability to service its interest obligations comfortably.
By May 31, 2023, the ratio further decreased to 20.68. While this demonstrates a continued downward trend, the ratio remains well above the generally accepted threshold of 3.0 or 2.0, implying that Nike continues to generate ample operating income over its interest expenses.
Looking ahead, the data for May 31, 2024, is unavailable, marked by a dash, which may imply a lack of recent data or uncertainty in the forecast for that period. For May 31, 2025, the ratio is noted as 0.00, which could suggest a projected cessation of interest coverage or potentially an accounting or reporting anomaly. If interpreted literally, it may indicate that interest expenses could be expected to be zero or that the company might not be incurring interest costs in that forecasted period.
Overall, the trend from 2021 through 2023 shows a gradual decline in interest coverage ratios, yet the ratios remain at levels indicative of sound financial health and the company's ability to comfortably meet its interest obligations during these periods.
Peer comparison
May 31, 2025