Nike Inc. (NYSE:NKE)

Current Ratio

The current ratio displayed an overall increasing trend from May 31, 2019, to May 31, 2023, starting at 2.1 and peaking at 2.72 in both 2021 and 2023. This suggests an improvement in the company’s ability to cover short-term liabilities with its current assets during this period. However, there was a slight decline to 2.4 in the latest period ending May 31, 2024, indicating a modest reduction in liquidity compared to the previous two years.

Quick Ratio

The quick ratio improved significantly from 1.14 in 2019 to a high of 1.85 in 2021, suggesting enhanced liquid asset coverage excluding inventories. After reaching this peak, it decreased gradually to 1.51 by May 31, 2024. Despite this decline, the quick ratio remained well above the 2019 level, reflecting a generally strong short-term liquidity position throughout the timeframe.

Cash Ratio

The cash ratio showed a substantial increase from 0.59 in 2019 to a peak of 1.39 in 2021, highlighting a strengthening cash or cash-equivalent position relative to current liabilities. Subsequently, the ratio saw a modest decline to 1.09 by 2024, but it stayed comfortably above the initial 2019 value. This pattern indicates the company's strategic management of highly liquid resources remained robust overall, even though there was slight easing in the most recent year.

The financial data over the six-year period reveals several notable trends in the company's short-term financial position.

Current assets

Current assets increased consistently from 16,525 million US dollars in 2019 to a peak of 28,213 million in 2022. However, a decline followed, with current assets decreasing to 25,202 million in 2023 before a slight recovery to 25,382 million in 2024. This trajectory indicates an overall growth in liquid and short-term assets with some volatility towards the most recent years.

Current liabilities

Current liabilities showed a generally upward trend over the same period. Starting at 7,866 million US dollars in 2019, liabilities increased to 10,730 million by 2022. A decrease was observed in 2023, down to 9,256 million, followed by an increase again to 10,593 million in 2024. These fluctuations suggest changes in short-term obligations that somewhat mirror the pattern in current assets but with a tendency for higher liabilities in later years.

Current ratio

The current ratio, which measures the ability to cover short-term liabilities with short-term assets, improved significantly from 2.1 in 2019 to a peak of 2.72 in both 2021 and 2023. However, a decline was noted in 2024, with the ratio decreasing to 2.4. Despite this recent decrease, the current ratio remains well above 2.0, indicating robust short-term liquidity throughout the period.

Overall, the data reflects a strong growth in current assets and current liabilities, with the liquidity position improving notably in the early years before a minor contraction in the latest year. The current ratio consistently remained healthy, demonstrating the company's solid capacity to meet short-term obligations despite some fluctuations in asset and liability levels.

The financial data reveals notable trends in liquidity and short-term financial health over the six-year period.

Total quick assets

There is a general upward trend in total quick assets from 2019 to 2024, with a significant increase observed from 2019 (8,935 million USD) to 2021 (17,939 million USD). After peaking around 2021-2022, total quick assets experienced a decline in 2023 to 14,806 million USD but partially recovered in 2024 to 16,009 million USD.

Current liabilities

Current liabilities show a generally increasing trend over the period, rising from 7,866 million USD in 2019 to 10,593 million USD in 2024. The increase is steady, with a minor reduction observed in 2023 (9,256 million USD) compared to the prior year. This moderate dip is followed by an increase again in 2024.

Quick ratio

The quick ratio rose significantly between 2019 and 2021, from 1.14 to 1.85, indicating an improving liquidity position over these years. However, starting in 2022, the quick ratio shows a gradual decline down to 1.51 in 2024. This suggests a reduction in liquidity coverage relative to current liabilities, although it remains above 1.0, indicating that quick assets still exceed current liabilities.

Overall, the data shows that while quick assets have generally increased, current liabilities have also grown, placing some pressure on liquidity as indicated by the declining quick ratio post-2021. The company maintains a healthy liquidity position but exhibits signs of tightening short-term financial flexibility in the most recent years.

The financial data reveals several key trends related to liquidity and short-term financial positioning over the six-year period ending May 31, 2024.

Total Cash Assets

There was a substantial increase in total cash assets from 2019 to 2021, growing from $4,663 million to a peak of $13,476 million. Following this peak, cash assets declined somewhat in 2022 and 2023 to $12,997 million and $10,675 million respectively, before increasing slightly again to $11,582 million in 2024. This pattern indicates an initial strong accumulation of cash reserves, followed by a reduction and moderate recovery in subsequent years.

Current Liabilities

Current liabilities showed a steady upward trend from $7,866 million in 2019 to $10,730 million in 2022. A notable dip occurred in 2023 when liabilities decreased to $9,256 million, before rising again to $10,593 million in 2024. This suggests fluctuations in short-term obligations, with a tendency toward increasing liabilities over the long term, interrupted by a temporary reduction in 2023.

Cash Ratio

Reflecting the relationship between cash assets and current liabilities, the cash ratio improved significantly from 0.59 in 2019 to a peak of 1.39 in 2021, indicating enhanced liquidity coverage. After 2021, the ratio declined gradually to 1.21 in 2022, 1.15 in 2023, and 1.09 in 2024. Despite this decline, the ratio remained above 1, suggesting that cash assets continued to cover current liabilities fully, though with decreasing margin.

Overall, the data indicates a period of growing liquidity strength until 2021, followed by some normalization with decreases in both cash assets and the cash ratio. Current liabilities increased generally but exhibited some volatility. The firm maintained an adequate cash buffer relative to its short-term obligations throughout the period, though the decreasing cash ratio trend after 2021 could warrant monitoring for potential impacts on liquidity risk.