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

Nike Inc. (NYSE:NKE)

Return on Capital (ROC)

Advanced level

Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company’s debt and equity structure. It measures business productivity performance.


Return on Invested Capital (ROIC)

Nike Inc., ROIC calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 2,477  4,182  2,703  4,046  3,720  3,241 
Invested capital2 19,083  14,182  15,218  15,685  13,344  12,271 
Performance Ratio
ROIC3 12.98% 29.49% 17.76% 25.79% 27.87% 26.41%
Benchmarks
ROIC, Competitors4
Colgate-Palmolive Co. 18.56% 22.99% 20.84% 23.39% 13.07%
Estée Lauder Cos. Inc. 4.27% 16.68% 14.34% 14.93% 18.95% 18.57%
Kimberly-Clark Corp. 20.35% 16.75% 20.66% 20.37% 8.20%

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 NOPAT. See details »

2 Invested capital. See details »

3 2020 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 2,477 ÷ 19,083 = 12.98%

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.’s ROIC improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Decomposition of ROIC

Nike Inc., decomposition of ROIC

Microsoft Excel LibreOffice Calc
ROIC = OPM1 × TO2 × 1 – CTR3
May 31, 2020 12.98% = 8.66% × 1.96 × 76.44%
May 31, 2019 29.49% = 12.66% × 2.76 × 84.46%
May 31, 2018 17.76% = 12.35% × 2.39 × 60.15%
May 31, 2017 25.79% = 14.61% × 2.19 × 80.59%
May 31, 2016 27.87% = 14.53% × 2.43 × 79.09%
May 31, 2015 26.41% = 14.15% × 2.49 × 74.86%

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 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 2020 year is the decrease in profitability measured by operating profit margin (OPM) ratio.


Operating Profit Margin (OPM)

Nike Inc., OPM calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 2,477  4,182  2,703  4,046  3,720  3,241 
Add: Cash operating taxes2 764  770  1,791  974  983  1,088 
Net operating profit before taxes (NOPBT) 3,241  4,952  4,495  5,020  4,703  4,329 
 
Revenues 37,403  39,117  36,397  34,350  32,376  30,601 
Profitability Ratio
OPM3 8.66% 12.66% 12.35% 14.61% 14.53% 14.15%
Benchmarks
OPM, Competitors4
Colgate-Palmolive Co. 21.43% 23.14% 23.90% 25.37% 17.69%
Estée Lauder Cos. Inc. 7.96% 17.18% 16.31% 15.81% 15.78% 15.59%
Kimberly-Clark Corp. 15.85% 13.03% 18.75% 18.96% 9.39%

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 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
OPM = 100 × NOPBT ÷ Revenues
= 100 × 3,241 ÷ 37,403 = 8.66%

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.’s OPM improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Turnover of Capital (TO)

Nike Inc., TO calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Selected Financial Data (US$ in millions)
Revenues 37,403  39,117  36,397  34,350  32,376  30,601 
Invested capital1 19,083  14,182  15,218  15,685  13,344  12,271 
Efficiency Ratio
TO2 1.96 2.76 2.39 2.19 2.43 2.49
Benchmarks
TO, Competitors3
Colgate-Palmolive Co. 1.13 1.32 1.32 1.30 1.41
Estée Lauder Cos. Inc. 1.03 1.29 1.32 1.33 1.78 1.80
Kimberly-Clark Corp. 1.62 1.64 1.53 1.55 1.57

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 Invested capital. See details »

2 2020 Calculation
TO = Revenues ÷ Invested capital
= 37,403 ÷ 19,083 = 1.96

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.’s TO improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Effective Cash Tax Rate (CTR)

Nike Inc., CTR calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Selected Financial Data (US$ in millions)
Net operating profit after taxes (NOPAT)1 2,477  4,182  2,703  4,046  3,720  3,241 
Add: Cash operating taxes2 764  770  1,791  974  983  1,088 
Net operating profit before taxes (NOPBT) 3,241  4,952  4,495  5,020  4,703  4,329 
Tax Rate
CTR3 23.56% 15.54% 39.85% 19.41% 20.91% 25.14%
Benchmarks
CTR, Competitors4
Colgate-Palmolive Co. 23.52% 24.65% 33.73% 29.07% 47.74%
Estée Lauder Cos. Inc. 47.80% 24.66% 33.62% 28.85% 32.53% 33.66%
Kimberly-Clark Corp. 20.64% 21.82% 28.03% 30.50% 44.54%

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 NOPAT. See details »

2 Cash operating taxes. See details »

3 2020 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 764 ÷ 3,241 = 23.56%

4 Click competitor name to see calculations.

Tax rate Description The company
CTR Effective cash tax rate on operating income. Nike Inc.’s CTR decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.