Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Nike Inc. (NYSE:NKE)

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Financial Reporting Quality: Aggregate Accruals

Advanced level

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.

Balance-Sheet-Based Accruals Ratio

Nike Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Operating Assets
Total assets
Less: Cash and equivalents
Less: Short-term investments
Operating assets
Operating Liabilities
Total liabilities
Less: Current portion of long-term debt
Less: Notes payable
Less: Long-term debt, excluding current portion
Operating liabilities
 
Net operating assets1
Balance-sheet-based aggregate accruals2
Financial Ratio
Balance-sheet-based accruals ratio3
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Colgate-Palmolive Co.
Estée Lauder Cos. Inc.
Kimberly-Clark Corp.
Balance-Sheet-Based Accruals Ratio, Sector
Personal Goods
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Goods

Based on: 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), 10-K (filing date: 2015-07-23).

1 2020 Calculation
Net operating assets = Operating assets – Operating liabilities
= – =

2 2020 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2020 – Net operating assets2019
= – =

3 2020 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Nike Inc. deteriorated earnings quality from 2019 to 2020.

Cash-Flow-Statement-Based Accruals Ratio

Nike Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Net income
Less: Cash provided by operations
Less: Cash (used) provided by investing activities
Cash-flow-statement-based aggregate accruals
Financial Ratio
Cash-flow-statement-based accruals ratio1
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Colgate-Palmolive Co.
Estée Lauder Cos. Inc.
Kimberly-Clark Corp.
Cash-Flow-Statement-Based Accruals Ratio, Sector
Personal Goods
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Goods

Based on: 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), 10-K (filing date: 2015-07-23).

1 2020 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × ÷ [( + ) ÷ 2] =

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Nike Inc. improved earnings quality from 2019 to 2020.