Ratios (Summary)

Nike Inc., short-term (operating) activity ratios

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Turnover Ratios
Inventory turnover 4.16 4.08 4.18 5.00 4.49 4.20
Receivables turnover 8.12 7.36 6.65 7.18 6.65 6.66
Payables turnover 8.67 8.60 7.73 8.14 10.24 7.95
Working capital turnover 2.61 3.15 2.84 2.50 2.97 3.38
Average No. of Days
Average inventory processing period 88 90 87 73 81 87
Add: Average receivable collection period 45 50 55 51 55 55
Operating cycle 133 140 142 124 136 142
Less: Average payables payment period 42 42 47 45 36 46
Cash conversion cycle 91 98 95 79 100 96

Source: Based on data from Nike Inc. Annual Reports

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Nike Inc.'s inventory turnover deteriorated from 2011 to 2012 but then improved from 2012 to 2013 not reaching 2011 level.
Receivables turnover An activity ratio equal to revenue divided by receivables. Nike Inc.'s receivables turnover improved from 2011 to 2012 and from 2012 to 2013.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Nike Inc.'s payables turnover increased from 2011 to 2012 and from 2012 to 2013.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Nike Inc.'s working capital turnover improved from 2011 to 2012 but then deteriorated significantly from 2012 to 2013.
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Nike Inc.'s average inventory processing period deteriorated from 2011 to 2012 but then improved from 2012 to 2013 not reaching 2011 level.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd. Nike Inc.'s average receivable collection period improved from 2011 to 2012 and from 2012 to 2013.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Nike Inc.'s operating cycle improved from 2011 to 2012 and from 2012 to 2013.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Nike Inc.'s cash conversion cycle deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level.

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Inventory Turnover

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Selected Financial Data (USD $ in millions)
Cost of sales 14,279  13,657  11,354  10,214  10,572  10,240 
Inventories 3,434  3,350  2,715  2,041  2,357  2,438 
Inventory Turnover, Comparison to Industry
Nike Inc.1 4.16 4.08 4.18 5.00 4.49 4.20
Industry, Consumer Goods 7.17 7.03 7.59 7.33 6.85

Source: Based on data from Nike Inc. Annual Reports

2013 Calculations

1 Inventory turnover = Cost of sales ÷ Inventories
= 14,279 ÷ 3,434 = 4.16

Ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Nike Inc.'s inventory turnover deteriorated from 2011 to 2012 but then improved from 2012 to 2013 not reaching 2011 level.

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Receivables Turnover

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Selected Financial Data (USD $ in millions)
Revenues 25,313  24,128  20,862  19,014  19,176  18,627 
Accounts receivable, net 3,117  3,280  3,138  2,650  2,884  2,795 
Receivables Turnover, Comparison to Industry
Nike Inc.1 8.12 7.36 6.65 7.18 6.65 6.66
Industry, Consumer Goods 13.22 12.06 13.55 12.61 13.79

Source: Based on data from Nike Inc. Annual Reports

2013 Calculations

1 Receivables turnover = Revenues ÷ Accounts receivable, net
= 25,313 ÷ 3,117 = 8.12

Ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Nike Inc.'s receivables turnover improved from 2011 to 2012 and from 2012 to 2013.

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Payables Turnover

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Selected Financial Data (USD $ in millions)
Cost of sales 14,279  13,657  11,354  10,214  10,572  10,240 
Accounts payable 1,646  1,588  1,469  1,255  1,032  1,288 
Payables Turnover, Comparison to Industry
Nike Inc.1 8.67 8.60 7.73 8.14 10.24 7.95
Industry, Consumer Goods 6.49 6.13 6.97 6.56 8.87

Source: Based on data from Nike Inc. Annual Reports

2013 Calculations

1 Payables turnover = Cost of sales ÷ Accounts payable
= 14,279 ÷ 1,646 = 8.67

Ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Nike Inc.'s payables turnover increased from 2011 to 2012 and from 2012 to 2013.

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Working Capital Turnover

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Selected Financial Data (USD $ in millions)
Current assets 13,626  11,531  11,297  10,959  9,734  8,839 
Less: Current liabilities 3,926  3,865  3,958  3,364  3,277  3,322 
Working capital 9,700  7,666  7,339  7,595  6,457  5,517 
Revenues 25,313  24,128  20,862  19,014  19,176  18,627 
Working Capital Turnover, Comparison to Industry
Nike Inc.1 2.61 3.15 2.84 2.50 2.97 3.38
Industry, Consumer Goods 18.38 18.73 23.30 16.63 27.61

Source: Based on data from Nike Inc. Annual Reports

2013 Calculations

1 Working capital turnover = Revenues ÷ Working capital
= 25,313 ÷ 9,700 = 2.61

Ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Nike Inc.'s working capital turnover improved from 2011 to 2012 but then deteriorated significantly from 2012 to 2013.

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Average Inventory Processing Period

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Selected Financial Data
Inventory turnover 4.16 4.08 4.18 5.00 4.49 4.20
Average Inventory Processing Period (no. of days), Comparison to Industry
Nike Inc.1 88 90 87 73 81 87
Industry, Consumer Goods 51 52 48 50 53

Source: Based on data from Nike Inc. Annual Reports

2013 Calculations

1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 4.16 = 88

Ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Nike Inc.'s average inventory processing period deteriorated from 2011 to 2012 but then improved from 2012 to 2013 not reaching 2011 level.

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Average Receivable Collection Period

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Selected Financial Data
Receivables turnover 8.12 7.36 6.65 7.18 6.65 6.66
Average Receivable Collection Period (no. of days), Comparison to Industry
Nike Inc.1 45 50 55 51 55 55
Industry, Consumer Goods 28 30 27 29 26

Source: Based on data from Nike Inc. Annual Reports

2013 Calculations

1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 8.12 = 45

Ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnoverd. Nike Inc.'s average receivable collection period improved from 2011 to 2012 and from 2012 to 2013.

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Operating Cycle

No. of days

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Selected Financial Data
Average inventory processing period 88 90 87 73 81 87
Average receivable collection period 45 50 55 51 55 55
Operating Cycle, Comparison to Industry
Nike Inc.1 133 140 142 124 136 142
Industry, Consumer Goods 79 82 75 79 79

Source: Based on data from Nike Inc. Annual Reports

2013 Calculations

1 Operating cycle = Average inventory processing period + Average receivable collection period
= 88 + 45 = 133

Ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Nike Inc.'s operating cycle improved from 2011 to 2012 and from 2012 to 2013.

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Average Payables Payment Period

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Selected Financial Data
Payables turnover 8.67 8.60 7.73 8.14 10.24 7.95
Average Payables Payment Period (no. of days), Comparison to Industry
Nike Inc.1 42 42 47 45 36 46
Industry, Consumer Goods 56 60 52 56 41

Source: Based on data from Nike Inc. Annual Reports

2013 Calculations

1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.67 = 42

Ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period.

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Cash Conversion Cycle

No. of days

 
May 31, 2013 May 31, 2012 May 31, 2011 May 31, 2010 May 31, 2009 May 31, 2008
Selected Financial Data
Average inventory processing period 88 90 87 73 81 87
Average receivable collection period 45 50 55 51 55 55
Average payables payment period 42 42 47 45 36 46
Cash Conversion Cycle, Comparison to Industry
Nike Inc.1 91 98 95 79 100 96
Industry, Consumer Goods 23 22 23 23 38

Source: Based on data from Nike Inc. Annual Reports

2013 Calculations

1 Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 88 + 45 – 42 = 91

Ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Nike Inc.'s cash conversion cycle deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level.

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