Nike Inc. (NYSE:NKE)

The analysis of the presented financial data reveals several trends regarding the identifiable intangible assets and goodwill over the six-year period ending May 31, 2024.

Identifiable Intangible Assets, Net

The net identifiable intangible assets exhibit a slight downward trend, decreasing from 283 million US dollars in 2019 to 259 million US dollars in 2024. There are minor fluctuations throughout the years, with a low of 269 million in 2021 and a slight increase to 286 million in 2022 before declining again. This suggests potential amortization or impairment effects affecting these assets over time.

Goodwill

Goodwill shows an overall increasing trend initially, rising markedly from 154 million US dollars in 2019 to a peak of 284 million in 2022. After reaching this peak, goodwill declines to 240 million in 2024. The initial growth may indicate acquisitions or capital investments that increased goodwill, whereas the subsequent decline could relate to impairment charges or asset revaluations.

Identifiable Intangible Assets and Goodwill Combined

The combined total of identifiable intangible assets and goodwill similarly increases from 437 million US dollars in 2019 to a peak of 570 million in 2022, reflecting the trends in goodwill driving the overall increase. Following this peak, the total decreases to 499 million in 2024, mirroring the declines in both goodwill and identifiable intangible assets individually. This pattern suggests that while acquisitions or revaluations bolstered the asset base through 2022, subsequent reductions have somewhat diminished the asset value.

Overall, the data indicates a period of asset growth until 2022, driven mainly by goodwill increases, followed by a downward adjustment phase that might reflect impairments or disposals. The decreasing identifiable intangible assets point to consistent amortization or write-downs, contributing to the net asset reduction in recent years.

Asset Trends

The reported total assets exhibited a steady increase from May 31, 2019, to May 31, 2022, rising from 23,717 million US dollars to 40,321 million US dollars. This represents a significant growth phase over three years. Subsequently, there was a decrease in reported total assets to 37,531 million US dollars as of May 31, 2023, followed by a slight recovery to 38,110 million US dollars in 2024.

The adjusted total assets mirrored this pattern closely, with a steady increase from 23,563 million US dollars in 2019 to 40,037 million US dollars in 2022, then a decrease to 37,250 million US dollars in 2023, and a moderate increase to 37,870 million US dollars in 2024. The differences between reported and adjusted total assets were consistently small, indicating minimal impact from goodwill adjustments on total asset valuation.

Equity Trends

Reported shareholders’ equity showed a different trend, initially declining from 9,040 million US dollars in 2019 to 8,055 million US dollars in 2020. Following this, there was a sharp increase to 12,767 million US dollars in 2021 and further growth to a peak of 15,281 million US dollars in 2022. After this peak, equity levels decreased to 14,004 million US dollars in 2023, with a slight recovery to 14,430 million US dollars in 2024.

Adjusted shareholders’ equity followed a closely similar pattern, starting at 8,886 million US dollars in 2019 and decreasing to 7,832 million US dollars in 2020. This was followed by substantial growth to 12,525 million US dollars in 2021 and a peak at 14,997 million US dollars in 2022. The value then declined to 13,723 million US dollars in 2023, with a modest increase to 14,190 million US dollars in 2024. The close alignment between reported and adjusted equity values suggests limited effect of goodwill adjustments on equity.

Overall Insights

The data indicates a period of significant growth in both assets and equity up to 2022, consistent with an expansion phase for the company. The decline observed in 2023 suggests a contraction or adjustment period, potentially indicating changes in asset composition, market conditions, or internal financial strategies.

The minimal differences between reported and goodwill adjusted figures across all periods imply that goodwill has a negligible impact on the company’s stated financial position in terms of total assets and shareholders’ equity.

The recovery observed in 2024, though moderate, points to stabilization after the fluctuations experienced in the previous year.

The analysis of financial performance ratios over the six-year period reveals several notable trends and fluctuations in operational efficiency, leverage, and profitability.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios show a declining trend from 2019 through 2022. The ratios decreased from approximately 1.65 in 2019 to about 1.16-1.17 in 2022, reflecting a reduction in how efficiently assets are utilized to generate sales. However, a recovery is observed in 2023 and 2024, with ratios increasing to approximately 1.35-1.37, indicating improved asset use efficiency in the most recent years.

Financial Leverage

Financial leverage exhibited significant variation during the period. The reported and adjusted leverage ratios rose sharply from around 2.62-2.65 in 2019 to a peak just below 4.0 in 2020. This suggests increased reliance on debt or other liabilities relative to equity at that point. Subsequently, leverage ratios declined steadily through 2024, stabilizing near the initial 2019 level of about 2.64-2.67, implying a reduction in financial risk and a return to moderate leverage.

Return on Equity (ROE)

ROE showed notable volatility, starting from a high level of approximately 44.5%-45.3% in 2019, then declining sharply to around 31.5%-32.4% in 2020. This was followed by a rebound in 2021 to mid-40% levels, after which there was a gradual decline through 2023. A slight recovery occurs in 2024, with adjusted ROE reaching approximately 40.2%. This pattern suggests fluctuating profitability and efficiency in generating shareholder returns, likely influenced by external economic conditions and operational factors.

Return on Assets (ROA)

ROA followed a pattern broadly consistent with ROE but at lower levels, reflecting net income generated relative to total assets. There was a sharp decrease from around 17% in 2019 to about 8% in 2020, indicating a significant drop in asset profitability during that period. From 2021 onward, ROA showed an improving trend, rising to roughly 15% in 2021-2022, followed by a slight dip in 2023 and a marginal recovery by 2024. This trend demonstrates fluctuations in operational performance and asset utilization effectiveness.

Overall, the data suggest a period of considerable operational impact around 2020, with declines in efficiency, leverage increase, and profitability reductions. Recovery trends from 2021 onwards are evident, with incremental improvements in asset turnover, leverage management, and returns. The adjustments for goodwill show minimal differences from reported figures, indicating goodwill has a limited effect on these financial metrics.

The data indicates a general increase in both reported and adjusted total assets from May 31, 2019, through May 31, 2022, followed by a decline in the subsequent year before a slight recovery in the final period. Specifically, reported total assets grew from approximately 23.7 billion US dollars in 2019 to over 40.3 billion in 2022, then decreased to around 37.5 billion in 2023, and slightly increased again to approximately 38.1 billion by 2024. Adjusted total assets follow a very similar pattern, reflecting minor adjustments likely related to goodwill considerations.

Regarding asset turnover ratios, both reported and adjusted metrics show a decline from 2019 to 2022, dropping from about 1.65 to 1.16 in reported terms, and from 1.66 to 1.17 in adjusted terms. This suggests a decreasing efficiency in using assets to generate revenue during that period. However, starting from 2023, there is a notable improvement in total asset turnover back up to approximately 1.36 in reported figures and 1.37 in adjusted figures, which remains steady into 2024.

Total Assets

Steadily increased over the first four years, peaking in 2022, followed by a contraction in 2023 and a slight recovery afterward.

Asset Adjustments

Adjusted total assets closely track reported total assets, indicating that goodwill adjustments do not significantly distort the overall asset base trends.

Total Asset Turnover

Decreased progressively during the initial years, reaching a low point in 2022, implying reduced asset utilization efficiency. Subsequently, a sharp rebound in turnover ratios reflects improved asset productivity.

Comparison between Reported and Adjusted Figures

The alignment of reported and adjusted figures for both total assets and turnover ratios suggests consistent asset management outcomes regardless of goodwill adjustments.

Overall, the data reveals an initial growth phase accompanied by declining asset efficiency, which reverses in the latest years, indicating efforts to enhance asset utilization and operational performance. The partial reduction in asset base alongside improved turnover ratios in recent years may signal strategic asset optimization or restructuring initiatives.

The financial data reveals several significant trends in the company's asset base, equity position, and leverage over the six-year period from May 31, 2019, to May 31, 2024.

Total Assets

Both reported and goodwill-adjusted total assets increased markedly from 2019 to 2022, with reported assets rising from approximately $23.7 billion to over $40.3 billion. This growth peaked in 2022 before declining by about 7% in 2023, followed by a slight rebound in 2024. The adjusted total assets followed a very similar pattern, starting slightly lower but mirroring the reported figures closely throughout the period.

Shareholders’ Equity

The shareholders’ equity, both reported and adjusted, displayed a more volatile trend. From 2019 to 2020, equity decreased noticeably, falling from roughly $9.0 billion to about $8.1 billion on a reported basis. Subsequently, equity surged substantially in 2021 and 2022, peaking at approximately $15.3 billion reported and $15.0 billion adjusted in 2022. However, equity dropped again in 2023 and showed a moderate increase in 2024, though remaining below the 2022 peak. The adjusted equity figures consistently tracked slightly below the reported values, indicating the exclusion of goodwill's impact decreases equity estimates.

Financial Leverage

Financial leverage exhibits notable fluctuations. Starting at a relatively moderate level near 2.6 in 2019, leverage increased sharply to nearly 3.9 by 2020. This spike suggests a significant rise in debt relative to equity during that year. From 2021 onward, leverage steadily declined to levels between 2.6 and 2.7, indicating a strategic reduction in financial risk or an improvement in equity relative to liabilities. The adjusted leverage ratios are marginally higher than the reported ones, reflecting adjustments due to goodwill.

Overall, the period reflects growth in asset holdings and considerable variability in equity, influenced by changes in retained earnings, capital structure, or other equity-related factors. The leverage ratios indicate the company experienced a peak in financial risk around 2020, followed by a period of deleveraging to more conservative leverage levels. The close alignment between reported and adjusted figures suggests the adjustments for goodwill have a moderate, yet consistent impact on balance sheet assessments.

The data reflects the financial performance and equity position over a six-year period. Observations focus on shareholder equity and return on equity (ROE), both reported and goodwill adjusted.

Shareholders’ Equity

Reported shareholders’ equity shows an initial decline from 9,040 million USD in 2019 to 8,055 million USD in 2020. This is followed by a significant increase to 12,767 million USD in 2021 and peaking at 15,281 million USD in 2022. In 2023, it decreases slightly to 14,004 million USD before rising again marginally to 14,430 million USD in 2024.

Adjusted shareholders’ equity, which accounts for goodwill, follows a similar pattern. It decreases from 8,886 million USD in 2019 to 7,832 million USD in 2020, then climbs to 12,525 million USD in 2021 and reaches 14,997 million USD in 2022. There is a subsequent decrease in 2023 to 13,723 million USD and a slight increase again in 2024 to 14,190 million USD.

Return on Equity (ROE)

Reported ROE started very high at 44.57% in 2019, then declined to 31.52% in 2020. It rebounded to 44.86% in 2021 but started a gradual downward trend afterward, with values of 39.57% in 2022 and 36.2% in 2023. There is a moderate recovery to 39.5% in 2024.

Adjusted ROE demonstrates a similar trend, starting at 45.34% in 2019, dropping to 32.42% in 2020, rising again to 45.72% in 2021, before declining to 40.31% in 2022 and 36.95% in 2023. The figure improves slightly to 40.17% in 2024.

Overall, the equity values suggest a volatile environment with a sharp dip in 2020, likely related to significant external factors, followed by strong recovery and growth until 2022. The decrease in 2023 equity indicates potential challenges or adjustments but a slight recovery in 2024 reflects stabilization. ROE trends mirror equity movements, notably a steep dip and recovery between 2019 and 2021, followed by a tapering trajectory with minor improvement in the final year. Adjusted figures consistently show marginally lower equity values and closely aligned ROE figures, indicating minimal impact from goodwill adjustments on profitability metrics.

The financial data demonstrates several notable trends over the six-year period examined. Total assets, both reported and goodwill adjusted, show a general upward trajectory from 2019 to 2022, peaking in the fiscal year ending May 31, 2022. Specifically, reported total assets increased from $23,717 million in 2019 to $40,321 million in 2022, before declining slightly to $37,531 million in 2023 and then modestly rising again to $38,110 million in 2024. Adjusted total assets follow a similar pattern, starting at $23,563 million in 2019, peaking at $40,037 million in 2022, decreasing to $37,250 million in 2023, and then increasing to $37,870 million in 2024.

Return on Assets (ROA), whether reported or adjusted, exhibits significant fluctuations during the same timeframe. Both reported and adjusted ROA percentages nearly halved from 2019 to 2020, dropping from approximately 17% to around 8%, reflecting a possible impact of adverse conditions or operational challenges during that year. Following the decline, ROA recovered strongly in 2021 and 2022, reaching levels close to or slightly above those in 2019. In 2023, both reported and adjusted ROA declined modestly but remained above 13%, indicating sustained profitability relative to asset base despite the reduction. The most recent data for 2024 shows a further rebound in ROA to approximately 15% for both reported and adjusted figures, suggesting an improvement in asset profitability.

The differences between reported and adjusted figures are minimal in both total assets and ROA, implying that goodwill adjustments have a relatively limited effect on the overall asset base and associated returns. This close alignment suggests that intangible assets like goodwill might be stable or proportionate relative to total assets during this period, and that operating performance metrics are consistent irrespective of these adjustments.

Overall, the asset base experienced growth until 2022, followed by a consolidation phase. The ROA data indicates a period of volatility with a sharp dip in 2020, likely linked to external disruptions, followed by strong recovery and consistent profitability thereafter. These patterns provide insights into the company's resilience and operational efficiency across the analyzed timeframe.