Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
Return on Invested Capital (ROIC)
Nike Inc., ROIC calculation, comparison to benchmarks
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 5,013) | 5,557) | 5,490) | 2,477) | 4,182) | 2,703) | |
| Invested capital2 | 20,394) | 21,137) | 21,022) | 19,083) | 14,182) | 15,218) | |
| Performance Ratio | |||||||
| ROIC3 | 24.58% | 26.29% | 26.11% | 12.98% | 29.49% | 17.76% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Deckers Outdoor Corp. | 25.81% | 25.26% | 23.46% | 20.11% | 21.51% | 10.63% | |
| lululemon athletica inc. | 20.63% | 26.61% | 18.52% | 23.66% | 21.12% | — | |
Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2023 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 5,013 ÷ 20,394 = 24.58%
4 Click competitor name to see calculations.
| Performance ratio | Description | The company |
|---|---|---|
| ROIC | A measure of the periodic, after tax, cash-on-cash yield earned in the business. | Nike Inc. ROIC improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023. |
Decomposition of ROIC
Nike Inc., decomposition of ROIC
Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The primary reason for the decrease in return on invested capital (ROIC) over 2023 year is the decrease in profitability measured by operating profit margin (OPM) ratio.
Operating Profit Margin (OPM)
Nike Inc., OPM calculation, comparison to benchmarks
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 5,013) | 5,557) | 5,490) | 2,477) | 4,182) | 2,703) | |
| Add: Cash operating taxes2 | 1,264) | 1,313) | 1,390) | 764) | 770) | 1,791) | |
| Net operating profit before taxes (NOPBT) | 6,276) | 6,871) | 6,880) | 3,241) | 4,952) | 4,495) | |
| Revenues | 51,217) | 46,710) | 44,538) | 37,403) | 39,117) | 36,397) | |
| Profitability Ratio | |||||||
| OPM3 | 12.25% | 14.71% | 15.45% | 8.66% | 12.66% | 12.35% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Deckers Outdoor Corp. | 18.24% | 18.36% | 20.21% | 16.38% | 16.88% | 12.26% | |
| lululemon athletica inc. | 17.28% | 22.36% | 19.88% | 23.62% | 22.15% | — | |
Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 Calculation
OPM = 100 × NOPBT ÷ Revenues
= 100 × 6,276 ÷ 51,217 = 12.25%
4 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| OPM | The operating profit margin (OPM) is the ratio of pretax economic earnings, or NOPBT, to sales. | Nike Inc. OPM deteriorated from 2021 to 2022 and from 2022 to 2023. |
Turnover of Capital (TO)
Nike Inc., TO calculation, comparison to benchmarks
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenues | 51,217) | 46,710) | 44,538) | 37,403) | 39,117) | 36,397) | |
| Invested capital1 | 20,394) | 21,137) | 21,022) | 19,083) | 14,182) | 15,218) | |
| Efficiency Ratio | |||||||
| TO2 | 2.51 | 2.21 | 2.12 | 1.96 | 2.76 | 2.39 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Deckers Outdoor Corp. | 1.86 | 1.82 | 1.55 | 1.50 | 1.55 | 1.55 | |
| lululemon athletica inc. | 1.80 | 1.61 | 1.21 | 1.33 | 1.34 | — | |
Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).
1 Invested capital. See details »
2 2023 Calculation
TO = Revenues ÷ Invested capital
= 51,217 ÷ 20,394 = 2.51
3 Click competitor name to see calculations.
| Efficiency ratio | Description | The company |
|---|---|---|
| TO | The turnover of capital (TO) is the ratio of sales to invested capital. Capital turnover is a function of the efficiency of working capital management and of net fixed assets. | Nike Inc. TO improved from 2021 to 2022 and from 2022 to 2023. |
Effective Cash Tax Rate (CTR)
Nike Inc., CTR calculation, comparison to benchmarks
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | 5,013) | 5,557) | 5,490) | 2,477) | 4,182) | 2,703) | |
| Add: Cash operating taxes2 | 1,264) | 1,313) | 1,390) | 764) | 770) | 1,791) | |
| Net operating profit before taxes (NOPBT) | 6,276) | 6,871) | 6,880) | 3,241) | 4,952) | 4,495) | |
| Tax Rate | |||||||
| CTR3 | 20.13% | 19.12% | 20.21% | 23.56% | 15.54% | 39.85% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Deckers Outdoor Corp. | 23.92% | 24.43% | 25.12% | 18.08% | 17.56% | 44.11% | |
| lululemon athletica inc. | 33.74% | 26.27% | 22.91% | 24.66% | 29.03% | — | |
Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2023 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 1,264 ÷ 6,276 = 20.13%
4 Click competitor name to see calculations.
| Tax rate | Description | The company |
|---|---|---|
| CTR | Effective cash tax rate on operating income. | Nike Inc. CTR decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level. |