Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
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Return on Invested Capital (ROIC)
Nike Inc., ROIC calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| ROIC3 | |||||||
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| lululemon athletica inc. | |||||||
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2025 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit After Taxes (NOPAT)
- There is a notable increase in NOPAT from 2020 to 2021, more than doubling from 2,477 million US dollars to 5,490 million US dollars. This elevated level remains relatively stable through 2022 and 2024, with slight fluctuations, peaking at 5,557 million US dollars in 2022 and slightly declining to 5,146 million US dollars in 2024. However, a significant drop is observed in 2025, where NOPAT decreases sharply to 2,913 million US dollars, almost halving compared to the previous year.
- Invested Capital
- Invested capital shows a generally upward trend from 19,083 million US dollars in 2020 to a peak of 22,129 million US dollars in 2024. There is a modest decline in 2023 compared to 2022, but the overall trend remains positive until 2024. In 2025, there is a noticeable reduction to 19,883 million US dollars, bringing the invested capital back closer to the levels observed earlier in the period.
- Return on Invested Capital (ROIC)
- The ROIC exhibits substantial improvement between 2020 and 2021, rising from 12.98% to 26.11%, indicating improved efficiency in generating returns from invested capital. This higher performance level is sustained through 2022 and 2024, with a slight declining trend from 26.29% in 2022 to 23.25% in 2024. In 2025, ROIC experiences a pronounced decline to 14.65%, which still remains above the 2020 value but significantly lower than the peak observed in earlier periods.
- Overall Observations
- The data reveals that the period from 2021 to 2024 represents a phase of enhanced profitability and capital efficiency, as indicated by elevated NOPAT and ROIC figures alongside increased invested capital. However, the year 2025 marks a reversal in these trends, characterized by a substantial drop in both NOPAT and ROIC, as well as a decrease in invested capital. This shift suggests potential challenges affecting profitability and capital deployment effectiveness in the most recent period analyzed.
Decomposition of ROIC
Nike Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| May 31, 2025 | = | × | × | ||||
| May 31, 2024 | = | × | × | ||||
| May 31, 2023 | = | × | × | ||||
| May 31, 2022 | = | × | × | ||||
| May 31, 2021 | = | × | × | ||||
| May 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
- Operating Profit Margin (OPM)
- The operating profit margin exhibited a significant increase from 8.66% in 2020 to a peak of 15.45% in 2021. After this peak, the margin showed a declining trend, reducing to 14.71% in 2022 and further decreasing to 12.25% in 2023. A slight recovery occurred in 2024, with the margin increasing to 12.9%, followed by a notable decline to 8.35% in 2025. Overall, the margin experienced volatility with an initial improvement followed by a downturn towards the end of the period.
- Turnover of Capital (TO)
- Turnover of capital steadily increased from 1.96 ratio in 2020 to 2.51 in 2023, indicating improved efficiency in using capital over the years. Despite a slight decrease to 2.32 in 2024, the ratio stabilized at 2.33 in 2025. The overall trend reflects an enhancement in asset utilization, with minor fluctuations in the latter years.
- 1 – Effective Cash Tax Rate (CTR)
- This metric remained relatively stable at high levels throughout the observed years. Starting at 76.44% in 2020, it peaked at 80.88% in 2022. Afterwards, a gradual decline is noticeable, reaching 75.38% in 2025. The consistency suggests a stable effective cash tax environment, with minor variations over time.
- Return on Invested Capital (ROIC)
- Return on invested capital demonstrated a strong upward movement from 12.98% in 2020 to an approximate peak of 26.29% in 2022. Following this peak, the ROIC displayed a decreasing trend, falling to 24.58% in 2023, 23.25% in 2024, and a more pronounced drop to 14.65% in 2025. This trend indicates an initial period of increasing returns on capital investment, succeeded by diminishing returns in the later years.
Operating Profit Margin (OPM)
Nike Inc., OPM calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | |||||||
| Add: Cash operating taxes2 | |||||||
| Net operating profit before taxes (NOPBT) | |||||||
| Revenues | |||||||
| Profitability Ratio | |||||||
| OPM3 | |||||||
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| lululemon athletica inc. | |||||||
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
OPM = 100 × NOPBT ÷ Revenues
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net operating profit before taxes (NOPBT)
- The net operating profit before taxes demonstrated significant fluctuation over the observed period. Starting at 3,241 million USD in 2020, it more than doubled to reach a peak of 6,880 million USD in 2021. However, in the subsequent years, NOPBT declined steadily to 3,865 million USD by 2025.
- Revenues
- Revenues exhibited a general upward trend from 37,403 million USD in 2020 to a peak of 51,362 million USD in 2024, reflecting consistent growth. In 2025, however, revenues declined to 46,309 million USD, indicating a reversal of the previous positive trend.
- Operating profit margin (OPM)
- Operating profit margin followed a pattern closely related to the changes in NOPBT. It increased sharply from 8.66% in 2020 to a high of 15.45% in 2021, followed by a gradual decline to 8.35% by 2025. This decline in profitability margins despite earlier revenue growth suggests rising costs or decreasing operational efficiency in the latter years.
- Overall Observations
- The data indicates that while revenue increased steadily until 2024, profitability as measured by both NOPBT and operating profit margin peaked in 2021 and progressively weakened thereafter. The decreasing operating profit margin alongside diminishing net operating profit before tax in the final years points toward challenges in cost management or pricing pressures, notwithstanding relatively high revenue levels. The downturn in revenues and profitability in 2025 highlights a need for careful strategic assessment moving forward.
Turnover of Capital (TO)
Nike Inc., TO calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Revenues | |||||||
| Invested capital1 | |||||||
| Efficiency Ratio | |||||||
| TO2 | |||||||
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| lululemon athletica inc. | |||||||
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
1 Invested capital. See details »
2 2025 Calculation
TO = Revenues ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Revenues
- Revenues exhibited consistent growth from 2020 through 2024, increasing from $37,403 million in 2020 to a peak of $51,362 million in 2024. However, in 2025, a decline occurred, with revenues falling to $46,309 million, indicating a potential setback or market challenge after several years of expansion.
- Invested Capital
- Invested capital showed a generally upward trend from 2020 to 2024, rising from $19,083 million to $22,129 million. In 2025, there was a contraction to $19,883 million, reversing some of the prior investment increases. This decline in capital investment might reflect strategic shifts or cost management measures aligned with the drop in revenues.
- Turnover of Capital (TO)
- The turnover of capital ratio demonstrated steady improvement over the observed period, increasing from 1.96 in 2020 to a high of 2.51 in 2023. Despite a slight decrease to 2.32 in 2024, the ratio stabilized at 2.33 in 2025. This suggests more efficient use of invested capital over time, with minor fluctuations possibly linked to changes in revenue and capital investment levels.
- Overall Assessment
- The financial data highlights a growth phase for the company from 2020 to 2024, with increasing revenues and invested capital, accompanied by improving capital turnover efficiency. The reversal in revenue and invested capital during 2025 may merit closer examination to determine underlying causes. Despite this, the capital turnover ratio remained relatively strong, indicating continued effective utilization of assets.
Effective Cash Tax Rate (CTR)
Nike Inc., CTR calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net operating profit after taxes (NOPAT)1 | |||||||
| Add: Cash operating taxes2 | |||||||
| Net operating profit before taxes (NOPBT) | |||||||
| Tax Rate | |||||||
| CTR3 | |||||||
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| lululemon athletica inc. | |||||||
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2025 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- Cash operating taxes exhibited a general upward trend from 764 million US dollars in 2020 to a peak of 1482 million in 2024, indicating an increased tax obligation over this period. However, in 2025, there was a substantial decline to 951 million, suggesting a notable reduction in tax payments compared to the prior year.
- Net Operating Profit Before Taxes (NOPBT)
- Net operating profit before taxes showed significant growth from 3241 million US dollars in 2020 to a high of 6880 million in 2021. It remained relatively stable through 2022 with a minor decrease in 2023 to 6276 million. In 2024, there was a slight recovery to 6627 million. Nevertheless, in 2025, NOPBT sharply declined to 3865 million, marking a considerable drop in pre-tax operating profitability.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate showed a downward trend from 23.56% in 2020 to its lowest point of 19.12% in 2022. Subsequent years presented a gradual increase, with the rate rising to 22.36% in 2024 and then further increasing to 24.62% in 2025. This indicates a fluctuating tax rate environment, with a notable rise in tax burden relative to cash operating profits in the latest year.
- Overall Insights
- Between 2020 and 2024, the company experienced growth in both net operating profits and cash operating taxes, while the effective tax rate initially declined and then rose. The decline in net operating profit and cash taxes in 2025, coupled with an increase in the tax rate, suggests that the company encountered operational challenges or changes in tax policy impacting profitability and tax expenses. The data points toward a volatile financial environment with significant year-to-year fluctuations, signaling potential risks to sustained profitability and tax planning strategies.