Stock Analysis on Net

Nike Inc. (NYSE:NKE)

Analysis of Solvency Ratios 

Microsoft Excel

Solvency Ratios (Summary)

Nike Inc., solvency ratios

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Debt Ratios
Debt to equity 0.62 0.74 1.20 0.38 0.39 0.31
Debt to equity (including operating lease liability) 0.83 1.00 1.62 0.38 0.39 0.31
Debt to capital 0.38 0.42 0.55 0.28 0.28 0.23
Debt to capital (including operating lease liability) 0.45 0.50 0.62 0.28 0.28 0.23
Debt to assets 0.23 0.25 0.31 0.15 0.17 0.16
Debt to assets (including operating lease liability) 0.31 0.34 0.42 0.15 0.17 0.16
Financial leverage 2.64 2.96 3.89 2.62 2.30 1.87
Coverage Ratios
Interest coverage 23.24 23.50 20.12 37.65 35.88 57.81
Fixed charge coverage 8.46 8.53 5.01 6.00 5.58 6.98

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

Solvency ratio Description The company
Debt to equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Nike Inc. debt to equity ratio improved from 2020 to 2021 and from 2021 to 2022.
Debt to equity ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. Nike Inc. debt to equity ratio (including operating lease liability) improved from 2020 to 2021 and from 2021 to 2022.
Debt to capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Nike Inc. debt to capital ratio improved from 2020 to 2021 and from 2021 to 2022.
Debt to capital ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. Nike Inc. debt to capital ratio (including operating lease liability) improved from 2020 to 2021 and from 2021 to 2022.
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets. Nike Inc. debt to assets ratio improved from 2020 to 2021 and from 2021 to 2022.
Debt to assets ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. Nike Inc. debt to assets ratio (including operating lease liability) improved from 2020 to 2021 and from 2021 to 2022.
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Nike Inc. financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.

Solvency ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Nike Inc. interest coverage ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.
Fixed charge coverage ratio A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. Nike Inc. fixed charge coverage ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

Debt to Equity

Nike Inc., debt to equity calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Current portion of long-term debt 500  — 
Notes payable 10  248  336  325 
Long-term debt, excluding current portion 8,920  9,413  9,406  3,464  3,468  3,471 
Total debt 9,430  9,415  9,657  3,479  3,810  3,802 
 
Shareholders’ equity 15,281  12,767  8,055  9,040  9,812  12,407 
Solvency Ratio
Debt to equity1 0.62 0.74 1.20 0.38 0.39 0.31
Benchmarks
Debt to Equity, Industry
Consumer Discretionary 1.59 2.31 2.45 2.37 2.31

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

1 2022 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 9,430 ÷ 15,281 = 0.62

Solvency ratio Description The company
Debt to equity ratio A solvency ratio calculated as total debt divided by total shareholders’ equity. Nike Inc. debt to equity ratio improved from 2020 to 2021 and from 2021 to 2022.

Debt to Equity (including Operating Lease Liability)

Nike Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Current portion of long-term debt 500  — 
Notes payable 10  248  336  325 
Long-term debt, excluding current portion 8,920  9,413  9,406  3,464  3,468  3,471 
Total debt 9,430  9,415  9,657  3,479  3,810  3,802 
Current portion of operating lease liabilities 420  467  445  —  —  — 
Operating lease liabilities, excluding current portion 2,777  2,931  2,913  —  —  — 
Total debt (including operating lease liability) 12,627  12,813  13,015  3,479  3,810  3,802 
 
Shareholders’ equity 15,281  12,767  8,055  9,040  9,812  12,407 
Solvency Ratio
Debt to equity (including operating lease liability)1 0.83 1.00 1.62 0.38 0.39 0.31
Benchmarks
Debt to Equity (including Operating Lease Liability), Industry
Consumer Discretionary 1.92 2.70 2.70 2.37 2.31

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 12,627 ÷ 15,281 = 0.83

Solvency ratio Description The company
Debt to equity ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. Nike Inc. debt to equity ratio (including operating lease liability) improved from 2020 to 2021 and from 2021 to 2022.

Debt to Capital

Nike Inc., debt to capital calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Current portion of long-term debt 500  — 
Notes payable 10  248  336  325 
Long-term debt, excluding current portion 8,920  9,413  9,406  3,464  3,468  3,471 
Total debt 9,430  9,415  9,657  3,479  3,810  3,802 
Shareholders’ equity 15,281  12,767  8,055  9,040  9,812  12,407 
Total capital 24,711  22,182  17,712  12,519  13,622  16,209 
Solvency Ratio
Debt to capital1 0.38 0.42 0.55 0.28 0.28 0.23
Benchmarks
Debt to Capital, Industry
Consumer Discretionary 0.61 0.70 0.71 0.70 0.70

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 9,430 ÷ 24,711 = 0.38

Solvency ratio Description The company
Debt to capital ratio A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. Nike Inc. debt to capital ratio improved from 2020 to 2021 and from 2021 to 2022.

Debt to Capital (including Operating Lease Liability)

Nike Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Current portion of long-term debt 500  — 
Notes payable 10  248  336  325 
Long-term debt, excluding current portion 8,920  9,413  9,406  3,464  3,468  3,471 
Total debt 9,430  9,415  9,657  3,479  3,810  3,802 
Current portion of operating lease liabilities 420  467  445  —  —  — 
Operating lease liabilities, excluding current portion 2,777  2,931  2,913  —  —  — 
Total debt (including operating lease liability) 12,627  12,813  13,015  3,479  3,810  3,802 
Shareholders’ equity 15,281  12,767  8,055  9,040  9,812  12,407 
Total capital (including operating lease liability) 27,908  25,580  21,070  12,519  13,622  16,209 
Solvency Ratio
Debt to capital (including operating lease liability)1 0.45 0.50 0.62 0.28 0.28 0.23
Benchmarks
Debt to Capital (including Operating Lease Liability), Industry
Consumer Discretionary 0.66 0.73 0.73 0.70 0.70

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 12,627 ÷ 27,908 = 0.45

Solvency ratio Description The company
Debt to capital ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. Nike Inc. debt to capital ratio (including operating lease liability) improved from 2020 to 2021 and from 2021 to 2022.

Debt to Assets

Nike Inc., debt to assets calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Current portion of long-term debt 500  — 
Notes payable 10  248  336  325 
Long-term debt, excluding current portion 8,920  9,413  9,406  3,464  3,468  3,471 
Total debt 9,430  9,415  9,657  3,479  3,810  3,802 
 
Total assets 40,321  37,740  31,342  23,717  22,536  23,259 
Solvency Ratio
Debt to assets1 0.23 0.25 0.31 0.15 0.17 0.16
Benchmarks
Debt to Assets, Industry
Consumer Discretionary 0.37 0.42 0.44 0.46 0.46

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 9,430 ÷ 40,321 = 0.23

Solvency ratio Description The company
Debt to assets ratio A solvency ratio calculated as total debt divided by total assets. Nike Inc. debt to assets ratio improved from 2020 to 2021 and from 2021 to 2022.

Debt to Assets (including Operating Lease Liability)

Nike Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Current portion of long-term debt 500  — 
Notes payable 10  248  336  325 
Long-term debt, excluding current portion 8,920  9,413  9,406  3,464  3,468  3,471 
Total debt 9,430  9,415  9,657  3,479  3,810  3,802 
Current portion of operating lease liabilities 420  467  445  —  —  — 
Operating lease liabilities, excluding current portion 2,777  2,931  2,913  —  —  — 
Total debt (including operating lease liability) 12,627  12,813  13,015  3,479  3,810  3,802 
 
Total assets 40,321  37,740  31,342  23,717  22,536  23,259 
Solvency Ratio
Debt to assets (including operating lease liability)1 0.31 0.34 0.42 0.15 0.17 0.16
Benchmarks
Debt to Assets (including Operating Lease Liability), Industry
Consumer Discretionary 0.45 0.49 0.48 0.46 0.46

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 12,627 ÷ 40,321 = 0.31

Solvency ratio Description The company
Debt to assets ratio (including operating lease liability) A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. Nike Inc. debt to assets ratio (including operating lease liability) improved from 2020 to 2021 and from 2021 to 2022.

Financial Leverage

Nike Inc., financial leverage calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Total assets 40,321  37,740  31,342  23,717  22,536  23,259 
Shareholders’ equity 15,281  12,767  8,055  9,040  9,812  12,407 
Solvency Ratio
Financial leverage1 2.64 2.96 3.89 2.62 2.30 1.87
Benchmarks
Financial Leverage, Industry
Consumer Discretionary 4.27 5.45 5.58 5.18 5.05

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

1 2022 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 40,321 ÷ 15,281 = 2.64

Solvency ratio Description The company
Financial leverage ratio A solvency ratio calculated as total assets divided by total shareholders’ equity. Nike Inc. financial leverage ratio decreased from 2020 to 2021 and from 2021 to 2022.

Interest Coverage

Nike Inc., interest coverage calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Net income 6,046  5,727  2,539  4,029  1,933  4,240 
Add: Income tax expense 605  934  348  772  2,392  646 
Add: Interest expense 299  296  151  131  124  86 
Earnings before interest and tax (EBIT) 6,950  6,957  3,038  4,932  4,449  4,972 
Solvency Ratio
Interest coverage1 23.24 23.50 20.12 37.65 35.88 57.81
Benchmarks
Interest Coverage, Industry
Consumer Discretionary 10.80 6.35 9.04 9.86 10.44

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 6,950 ÷ 299 = 23.24

Solvency ratio Description The company
Interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments. Nike Inc. interest coverage ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

Fixed Charge Coverage

Nike Inc., fixed charge coverage calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Net income 6,046  5,727  2,539  4,029  1,933  4,240 
Add: Income tax expense 605  934  348  772  2,392  646 
Add: Interest expense 299  296  151  131  124  86 
Earnings before interest and tax (EBIT) 6,950  6,957  3,038  4,932  4,449  4,972 
Add: Operating lease costs 593  589  569  829  820  731 
Earnings before fixed charges and tax 7,543  7,546  3,607  5,761  5,269  5,703 
 
Interest expense 299  296  151  131  124  86 
Operating lease costs 593  589  569  829  820  731 
Fixed charges 892  885  720  960  944  817 
Solvency Ratio
Fixed charge coverage1 8.46 8.53 5.01 6.00 5.58 6.98
Benchmarks
Fixed Charge Coverage, Industry
Consumer Discretionary 5.36 3.44 4.38 4.80 5.20

Based on: 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31).

1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 7,543 ÷ 892 = 8.46

Solvency ratio Description The company
Fixed charge coverage ratio A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. Nike Inc. fixed charge coverage ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.