Stock Analysis on Net
Stock Analysis on Net

Nike Inc. (NYSE:NKE)

Analysis of Property, Plant and Equipment

Microsoft Excel LibreOffice Calc

Property, Plant and Equipment Disclosure

Nike Inc., balance sheet: property, plant and equipment

US$ in millions

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May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Land and improvements 363  345  329  331  285  286 
Buildings 3,365  2,442  2,445  2,195  1,564  1,467 
Machinery and equipment 3,023  2,751  2,726  —  —  — 
Internal-use software 1,391  1,483  1,609  —  —  — 
Machinery, equipment and internal-use software (legacy) —  —  —  4,230  3,867  3,510 
Leasehold improvements 1,608  1,554  1,563  1,494  1,484  1,338 
Construction in process 311  1,086  797  641  758  437 
Property, plant and equipment, gross 10,061  9,661  9,469  8,891  7,958  7,038 
Accumulated depreciation (5,157) (4,795) (4,725) (4,437) (3,969) (3,518)
Property, plant and equipment, net 4,904  4,866  4,744  4,454  3,989  3,520 

Based on: 10-K (filing date: 2021-07-20), 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21).

Item Description The company
Property, plant and equipment, gross Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Nike Inc.’s property, plant and equipment, gross increased from 2019 to 2020 and from 2020 to 2021.
Property, plant and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Nike Inc.’s property, plant and equipment, net increased from 2019 to 2020 and from 2020 to 2021.

Asset Age Ratios (Summary)

Nike Inc., asset age ratios

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May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Average age ratio 53.18% 51.47% 51.70% 51.83% 51.73% 52.10%
Estimated total useful life (years) 13 13 13 11 11 10
Estimated age, time elapsed since purchase (years) 7 7 7 6 6 5
Estimated remaining life (years) 6 6 6 6 5 5

Based on: 10-K (filing date: 2021-07-20), 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Nike Inc.’s average age ratio of depreciable property, plant and equipment improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Nike Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Nike Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.
Estimated remaining life Nike Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

Average Age

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Accumulated depreciation 5,157  4,795  4,725  4,437  3,969  3,518 
Property, plant and equipment, gross 10,061  9,661  9,469  8,891  7,958  7,038 
Land and improvements 363  345  329  331  285  286 
Asset Age Ratio
Average age1 53.18% 51.47% 51.70% 51.83% 51.73% 52.10%

Based on: 10-K (filing date: 2021-07-20), 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21).

2021 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land and improvements)
= 100 × 5,157 ÷ (10,061363) = 53.18%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. Nike Inc.’s average age ratio of depreciable property, plant and equipment improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Property, plant and equipment, gross 10,061  9,661  9,469  8,891  7,958  7,038 
Land and improvements 363  345  329  331  285  286 
Depreciation expense 744  721  705  747  706  649 
Asset Age Ratio (Years)
Estimated total useful life1 13 13 13 11 11 10

Based on: 10-K (filing date: 2021-07-20), 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21).

2021 Calculations

1 Estimated total useful life = (Property, plant and equipment, gross – Land and improvements) ÷ Depreciation expense
= (10,061363) ÷ 744 = 13

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. Nike Inc.’s estimated total useful life of depreciable property, plant and equipment decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Accumulated depreciation 5,157  4,795  4,725  4,437  3,969  3,518 
Depreciation expense 744  721  705  747  706  649 
Asset Age Ratio (Years)
Time elapsed since purchase1 7 7 7 6 6 5

Based on: 10-K (filing date: 2021-07-20), 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21).

2021 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 5,157 ÷ 744 = 7

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company’s fixed assets. Useful for comparison purposes. Nike Inc.’s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2019 to 2020 but then deteriorated significantly from 2020 to 2021.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Property, plant and equipment, net 4,904  4,866  4,744  4,454  3,989  3,520 
Land and improvements 363  345  329  331  285  286 
Depreciation expense 744  721  705  747  706  649 
Asset Age Ratio (Years)
Estimated remaining life1 6 6 6 6 5 5

Based on: 10-K (filing date: 2021-07-20), 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21).

2021 Calculations

1 Estimated remaining life = (Property, plant and equipment, net – Land and improvements) ÷ Depreciation expense
= (4,904363) ÷ 744 = 6

Asset age ratio Description The company
Estimated remaining life Nike Inc.’s estimated remaining life of depreciable property, plant and equipment increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.