Nike Inc (NKE)
Solvency ratios
| May 31, 2025 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.77 | 2.70 | 2.70 | 2.72 | 2.64 | 2.63 | 2.63 | 2.63 | 2.68 | 2.64 | 2.60 | 2.60 | 2.64 | 2.60 | 2.61 | 2.64 | 2.96 | 3.03 | 3.27 | 3.61 |
The analysis of Nike Inc.'s solvency ratios from the provided data indicates a consistent pattern over the reported periods, with notable observations as follows:
1. Debt-to-Assets Ratio: The data consistently shows a ratio of zero across all time points from August 2020 through May 2025. This suggests that Nike Inc. has maintained a negligible or nonexistent level of debt funding relative to its total assets during this period. Such a condition points to a highly conservative capital structure, emphasizing equity financing or internal cash flows over external debt.
2. Debt-to-Capital Ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio remains at zero across all dates, reinforcing the inference that Nike has not relied on debt to finance its operations or growth initiatives within this timeframe. This zero ratio indicates that the entirety of the company’s capital structure is composed of equity, with no debt included in its capital base.
3. Debt-to-Equity Ratio: The debt-to-equity ratio also records zero throughout all periods, confirming the absence of leverage. This ratio underscores a capital structure entirely financed by equity, with no external debt contributing to the company's capital mix.
4. Financial Leverage Ratio: The financial leverage ratio displays values greater than one, ranging from approximately 2.60 to 3.61, with a general downward trend from 3.61 in August 2020 to roughly 2.70 in the latest periods. The ratio reflects the degree to which Nike employs financial leverage to support its assets relative to its equity base. A ratio substantially above 1 indicates leverage, but given the other ratios' zeros, this figure primarily suggests the use of other forms of leverage or was influenced by accounting conventions or specific structural factors. The observed decline suggests a gradual reduction in leveraging effect or a shift in capital structure that might include internal financing, revaluation of assets, or other factors not directly related to traditional debt.
Summary: Nike Inc.'s solvency ratios strongly imply a scenario of negligible or absent external debt, with a capital structure that appears to rely entirely on equity. Despite the positive financial leverage ratios, the absence of debt-based ratios indicates that leverage in this context may pertain to operational or accounting measures rather than true financial leverage. Over time, there has been a trend towards reduced leverage, implying a move towards an even more conservative or equity-centric capital structure. This financial positioning supports high solvency and low financial risk, aligning with a company that emphasizes liquidity and balance sheet strength.
Coverage ratios
| May 31, 2025 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 18.58 | 30.79 | 28.22 | 39.70 | 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 |
The interest coverage ratio for Nike Inc. demonstrates a consistent capacity to meet its interest obligations over the analyzed period, reflecting a generally strong financial position. Starting from August 31, 2020, the ratio stood at 24.01, indicating that the company's earnings before interest and taxes (EBIT) were substantially more than its interest expenses. Throughout the subsequent quarters, the ratio experienced fluctuations but remained at elevated levels, generally maintaining a range between approximately 16.81 and 58.44.
Notably, the ratio saw a peak of 58.44 on May 31, 2024, which suggests a significant improvement in earnings relative to interest obligations around that time. Conversely, there was a decline in the ratio afterward, reaching as low as 18.58 projected for May 31, 2025, pointing to a potential decrease in profitability or higher interest expenses during that period.
Overall, the high and relatively stable interest coverage ratios across multiple periods indicate that Nike Inc. has maintained a strong ability to service its interest expenses, reducing financial risk and suggesting conservative leverage capacity. The observed fluctuations do not appear to threaten the company's financial stability but should be monitored alongside earnings and debt levels to ensure ongoing resilience.