Nike Inc (NKE)
Interest coverage
| 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 |
| Interest expense | US$ in thousands | — | 286,000 | 205,000 | 262,000 | 89,000 |
| Interest coverage | — | 20.68 | 32.56 | 26.48 | 35.00 |
May 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $5,868,000K ÷ $—K
= —
Interest coverage measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations. Looking at Nike Inc's interest coverage over the past five years, we observe a declining trend from 35.00 in 2020 to an unknown figure in 2024.
In 2023, the interest coverage ratio was 20.68, reflecting the company's strong capacity to cover its interest expenses 20.68 times over. This indicates a healthy financial position, suggesting that Nike had significant earnings relative to its interest payments in that year.
The subsequent years show even higher interest coverage ratios, with 32.56 in 2022 and 26.48 in 2021. These ratios further demonstrate Nike's ability to easily meet interest obligations from its earnings, although the ratios decreased compared to the previous years.
Overall, Nike Inc has maintained strong interest coverage ratios over the years, which is a positive indicator of its financial health and ability to manage its debt obligations efficiently. It would be insightful to have the 2024 data to assess the company's latest interest coverage ratio and the continuation of this trend.
Peer comparison
May 31, 2024