Nike Inc (NKE)
Interest coverage
| 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 |
| Interest expense (ttm) | US$ in thousands | 128,000 | 162,000 | 117,000 | 108,000 | 133,000 | 146,000 | 140,000 | 119,000 | 134,000 | 122,000 | 161,000 | 205,000 | 228,000 | 239,000 | 254,000 | 262,000 | 249,000 | 197,000 | 139,000 | 89,000 |
| Interest coverage | 38.49 | 33.80 | 50.56 | 58.44 | 45.01 | 41.52 | 41.60 | 49.71 | 45.99 | 52.29 | 38.80 | 32.56 | 31.23 | 30.00 | 28.72 | 26.48 | 16.81 | 18.77 | 24.01 | 35.00 |
February 28, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $4,927,000K ÷ $128,000K
= 38.49
The interest coverage ratios of Nike Inc. over the observed period exhibit a generally strong capacity to meet interest obligations, with ratios consistently well above 1.0, indicating robust earnings relative to interest expenses. Notably, the ratios demonstrate significant fluctuations, reflecting variations in earnings and possibly shifts in debt levels or interest costs.
Starting from May 31, 2020, the ratio was exceptionally high at 35.00, suggesting very comfortable interest coverage. This high level persisted through August and November 2020, albeit with some decline to 18.77 by November 30, 2020. The subsequent period saw a gradual increase in interest coverage, reaching 30.00 in November 2021 and surpassing 50 in November 2022, with the ratio topping at 52.29 on November 30, 2022. This peak indicates a notably strong ability to service interest obligations during that period.
From late 2022 onwards, the ratios remained well above 35, with a recorded high of 58.44 in May 2024, reaffirming the company's substantial earnings buffer relative to interest expenses. Although there are some variability—such as a dip to 41.52 on November 30, 2023, and 45.01 on February 29, 2024—these figures still reflect solid coverage levels.
Overall, the trend indicates that Nike Inc. has maintained a stable and comfortable interest coverage position over the period, with ratios consistently well above the critical threshold of 1.0. During this timeframe, the firm demonstrated resilience in earnings capacity to comfortably service its debt obligations, even amidst fluctuating economic or operational conditions. The high and sustained interest coverage ratios suggest a conservative approach to debt management and a strong underlying profitability profile.
Peer comparison
Feb 28, 2025