Nike Inc. (NYSE:NKE)

The financial leverage of the company showed an overall increasing trend from August 2018 through May 2020, rising from 2.5 to a peak of 3.89. This indicates a growing reliance on debt financing during this period. Following this peak, financial leverage gradually decreased and stabilized around 2.6 to 2.7 from May 2021 onwards, suggesting a moderate and more controlled use of financial leverage in recent quarters.

Regarding the debt to equity ratio, a substantial increase occurs in May 2020, reaching 1.20 from 0.38 in the previous quarter, signifying a significant rise in debt relative to equity. After this spike, the ratio declines steadily to about 0.62 by August 2024, indicating a reduction in leverage and a strengthening equity base over time. When including operating lease liabilities, the debt to equity ratio shows a similar spike in May 2020, jumping to 1.62 from 0.74 previously, and then gradually declines thereafter, though remaining higher than the basic debt to equity ratio, reflecting the impact of lease obligations on total leverage.

The debt to capital ratio mirrors similar patterns, exhibiting a sharp increase in May 2020 to 0.55 from a consistent low of around 0.28. This ratio then decreases to about 0.39 and remains relatively stable in subsequent periods. Including operating lease liabilities, the debt to capital ratio increased more markedly, peaking at 0.62 in May 2020, followed by a gradual reduction to approximately 0.46 through early 2025, again highlighting the influence of lease obligations.

In terms of debt to assets, the ratio remains relatively moderate and stable before May 2020, around 0.14-0.16, but spikes to 0.31 at May 2020. Including operating lease liabilities, the ratio increases more significantly, reaching 0.42 in the same quarter. After this point, the ratios gradually decline and stabilize around 0.23 to 0.25 when excluding leases and 0.31 to 0.33 when including them, indicating more cautious asset financing levels post-spike.

Overall, the key trends reveal a pronounced increase in all debt-related ratios in May 2020, likely associated with changes in financing or lease accounting standards during that period. Post-spike, the company appears to have steadily reduced leverage levels, reflected in declining debt ratios and financial leverage, moving towards a more conservative capital structure by 2024 and early 2025. The inclusion of operating lease liabilities consistently results in higher reported leverage, underscoring the significance of lease obligations in the company's financial profile.

The financial data reveals notable fluctuations and trends in key balance sheet metrics over the analyzed periods.

Total Debt

The total debt level remained relatively stable between approximately 3,470 million and 3,770 million USD from August 2018 through February 2020, indicating consistent borrowing or debt management during that period. However, a significant increase is observed starting May 2020, with total debt jumping sharply to around 9,657 million USD. Following this spike, debt levels slightly decreased but stayed elevated near the 9,400 to 9,000 million USD range up to the most recent data point in February 2025. This suggests a substantial increase in leverage or borrowing activities around early 2020, potentially reflecting strategic financing or external market conditions influencing capital structure.

Shareholders’ Equity

Shareholders’ equity followed a generally upward trend over the entire timeframe. Starting from approximately 8,729 million USD in November 2018, equity moderately increased to highs exceeding 15,000 million USD between May 2022 and August 2022. Despite some minor fluctuations post this peak, equity levels mostly remained stable, ranging between roughly 13,900 million and 14,400 million USD toward the last recorded periods. This steady increase, particularly noticeable after 2020, points to retained earnings accumulation or capital raises supporting growth initiatives.

Debt to Equity Ratio

The debt-to-equity ratio displays an apparent correlation with shifts in debt and equity. Prior to May 2020, the ratio stayed below 0.4, indicating a conservative leverage posture. A sharp increase occurs in May 2020, peaking at 1.2, corresponding with the debt surge. Subsequently, the ratio declines steadily to around 0.62 by August 2024, reflecting a rebalancing of the capital structure as equity growth helped offset elevated debt. Despite this improvement, the ratio remains above pre-2020 levels, indicating a moderately higher leverage stance in recent years.

Overall, the financial trends suggest a strategic adjustment in financing, highlighted by a considerable increase in debt in mid-2020, accompanied by a consistent rise in shareholders’ equity. The debt-to-equity ratio demonstrates a return towards balanced leverage after peaking but indicates a structural shift towards higher indebtedness compared to the pre-2020 baseline.

The financial data reveals notable fluctuations and trends over the examined periods regarding debt levels, shareholders' equity, and leverage ratios.

Total Debt (including operating lease liability)

Total debt remained relatively stable around 3,480 million US dollars from August 2018 through May 2019, then experienced a significant increase starting August 2019, nearly doubling to peak at approximately 13,015 million US dollars by May 2020. Following this peak, total debt gradually decreased and stabilized around 12,000 million US dollars from November 2020 through the latest period in February 2025, exhibiting minor fluctuations.

Shareholders’ Equity

Shareholders’ equity showed a generally upward trajectory throughout the entire period. Beginning near 9,000 million US dollars in 2018, equity steadily increased, crossing the 10,000 million mark by November 2020 and continuing to rise to a peak of approximately 15,822 million US dollars by August 2022. Thereafter, equity demonstrated a slight decline and some volatility, trending downward to about 14,000 million US dollars in the most recent periods by early 2025.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio closely reflects the movements of debt and equity. Initially stable near 0.39 between August 2018 and May 2019, the ratio sharply increased beginning August 2019, reaching a peak of 1.62 by May 2020, indicating substantially higher leverage. Following the peak, the ratio steadily declined through subsequent periods, settling between 0.83 and 0.87 from August 2022 through February 2025, suggesting a normalization and reduction in leverage relative to equity throughout this latter timeframe.

Overall, the data indicates that the company underwent a period of increased borrowing and leverage culminating around mid-2020. Subsequently, the company moderated its debt levels relative to equity, which had been appreciating steadily until a mild decrease toward the end of the analyzed periods. The resulting post-2020 financial position exhibits a more balanced capital structure with improved equity support relative to total debt.

The total debt exhibited a significant increase starting from the period ending May 31, 2020, jumping from levels around 3,479–3,768 million US dollars in the prior periods to peaks near 9,657 million US dollars. After this spike, total debt remained relatively stable, fluctuating slightly but maintaining a level close to 9,000 million US dollars through to the latest period ending February 28, 2025.

Total capital showed a steady growth trend from August 31, 2018, through November 30, 2019, increasing gradually from approximately 12,210–13,119 million US dollars. A marked rise occurred starting May 31, 2020, with capital levels climbing sharply and peaking at around 23,773 million US dollars by November 30, 2021. Following this peak, total capital stabilized with minor fluctuations, generally remaining in the range of 22,906 to 23,339 million US dollars through the most recent period.

The debt-to-capital ratio demonstrated a noticeable change pattern. Initially, from August 2018 to February 2020, the ratio was steady, mostly around 0.28 to 0.29. However, coinciding with the rise in total debt and capital in May 2020, the ratio surged sharply to 0.55, indicating a rapid increase in leverage relative to capital. Subsequently, the ratio trended downward steadily from the peak, reaching a low around 0.37–0.38 by May 2022 and then oscillating narrowly around 0.38 to 0.39 through to February 2025. This suggests a gradual deleveraging after the initial sharp increase in debt levels, settling into a moderately stable leverage position.

Overall, the financial data reflect a period of substantial capital expansion and debt accumulation beginning around mid-2020, followed by a phase of relative stabilization in both total debt and capital, alongside a moderated leverage ratio. This pattern may indicate strategic financial adjustments during that timeframe, with management maintaining a consistent capital structure in recent periods.

Total Debt

Sharp increase around mid-2020 followed by stabilization near 9,000 million US dollars.

Total Capital

Gradual growth pre-2020, then rapid increase peaking in late 2021, followed by stable levels.

Debt-to-Capital Ratio

Stable near 0.28 pre-2020, spike to 0.55 in mid-2020, gradual decline and stabilization near 0.39 thereafter.

Total Debt (including operating lease liability)

The total debt exhibited a notable increase beginning in mid-2019, rising sharply from 3,479 million USD in May 2019 to a peak of approximately 13,015 million USD in May 2020. Following this peak, the debt level gradually declined, stabilizing around 12,000 million USD in the later periods of 2023 and early 2024. This pattern suggests a period of heavy borrowing or increased liabilities during 2019-2020, which was partially reversed in subsequent years with a gradual deleveraging trend.

Total Capital (including operating lease liability)

Total capital demonstrated a generally upward trend throughout the observed periods. Starting at approximately 12,478 million USD in August 2018, it increased significantly to reach over 28,000 million USD by mid-2022 before showing some fluctuation and a slight decline in the most recent quarters of 2023 and 2024. This increase reflects growth in the company's overall financing structure, possibly through equity, retained earnings, or increased borrowing, with some stabilization or slight reduction in recent quarters.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio remained relatively stable around 0.28 until May 2019 but then experienced a sharp increase during mid-2019 to 2020, peaking at 0.62 in May 2020. This sharp rise corresponds to the spike in total debt previously noted. After this peak, the ratio steadily declined, moving towards a range between 0.44 and 0.47 across 2021 to early 2025. This indicates the company reduced its relative reliance on debt within its capital structure over time, moving towards a more balanced or conservative leverage position.

Overall Insights

The data indicates a significant increase in leverage during the 2019-2020 period, likely driven by external factors necessitating increased debt. Subsequently, the company undertook a gradual deleveraging process, improving its debt to capital ratio. Meanwhile, the overall capital base expanded consistently through these years, suggesting ongoing growth or reinvestment efforts. The trend points to an adaptive capital management strategy responding to liquidity needs and market conditions, with a gradual return to more typical leverage levels post-2020.

The financial data reveals several key trends in the company's debt and asset levels, as well as their relationship over time.

Total Debt

Total debt remained relatively stable from August 2018 through February 2020, fluctuating slightly around the 3,480 million US dollars mark. A notable increase occurred in May 2020 when total debt surged sharply to approximately 9,657 million US dollars, nearly tripling the prior levels. Following this spike, debt levels stayed elevated but showed modest fluctuations, generally remaining between 8,900 and 9,400 million US dollars through to February 2025, suggesting sustained higher leverage compared to the pre-2020 period.

Total Assets

Total assets showed a consistent upward trajectory from August 2018 to November 2021, growing from roughly 22,483 million US dollars to about 38,917 million US dollars. This steady increase indicates ongoing asset accumulation over the pre-pandemic and early pandemic periods. After peaking near this level, asset values experienced some volatility, declining during late 2022 and early 2023 to around 36,786 million US dollars before partially recovering and stabilizing near the 37,500 million US dollars range by early 2025.

Debt to Assets Ratio

The debt-to-assets ratio initially decreased gradually from 0.16 in August 2018 to 0.13 by February 2020, reflecting improved balance sheet strength and relatively faster asset growth compared to debt. However, coinciding with the sharp debt increase in May 2020, this ratio nearly doubled, jumping to 0.31. Subsequently, the debt-to-assets ratio declined gradually through the remainder of the period, fluctuating around 0.23 to 0.25 between mid-2021 and early 2025, suggesting an ongoing effort to manage leverage despite elevated debt levels.

In summary, the data reflects a significant increase in debt during early 2020, likely related to external factors affecting liquidity needs or capital structure adjustments. Total assets grew steadily before experiencing some recent moderation. The debt-to-assets ratio followed these movements closely, initially improving, then spiking due to debt growth, followed by partial stabilization. These patterns highlight shifts in financial policy or market conditions impacting capital structure and asset management over the observed timeframe.

The financial data reveals several notable trends regarding debt, assets, and leverage ratios over the reported periods.

Total Debt (including operating lease liability)

Total debt remained relatively stable from August 2018 through May 2019, around the 3,480 million US$ range. There was a marked increase starting August 2019, nearly doubling by May 2020 to approximately 13,000 million US$, reflecting a significant rise in liabilities. Post-May 2020, total debt fluctuated mildly but maintained a downward trend overall, declining gradually from roughly 12,800 million US$ to about 11,900 million US$ by February 2025. This suggests efforts to manage or reduce debt levels following the peak in mid-2020.

Total Assets

Total assets exhibited a steady upward trend from around 22,500 million US$ in August 2018 to a peak near 41,000 million US$ in August 2022. After this peak, assets declined progressively to approximately 37,800 million US$ by February 2025. This pattern indicates asset growth over the initial periods followed by a contraction or divestment phase in recent quarters.

Debt to Assets Ratio (including operating lease liability)

The ratio remained low and stable between 0.15 and 0.16 from August 2018 to May 2019, indicating relatively conservative leverage. A sharp increase occurred from August 2019 through May 2020, reaching a peak of 0.42, concurrent with the surge in total debt. Following this peak, the leverage ratio decreased steadily, stabilizing around 0.31-0.33 from late 2021 through early 2025. This suggests improved balance sheet leverage despite asset fluctuations, implying a partial deleveraging process or asset base normalization.

Overall, the company experienced a period of significant debt accumulation culminating in mid-2020, possibly linked to specific strategic initiatives or external conditions. Subsequently, the data shows indications of financial consolidation, with reductions in debt and a shrinking asset base contributing to a more balanced leverage position. These dynamics highlight a transition from an elevated risk posture toward a more controlled financial structure over the latter half of the dataset.

The analysis of the quarterly financial data reveals several notable trends in the company's assets, equity, and financial leverage over the observed period.

Total Assets

The company's total assets demonstrated a generally increasing trend from August 2018 through May 2021, rising from approximately US$22.5 billion to nearly US$37.7 billion. A pronounced surge is evident between May 2019 and August 2020, where assets increased sharply from US$23.7 billion to over US$33 billion. Following this period, total assets continued to fluctuate mildly but largely stabilized around the mid to high US$37 billion range until early 2024. From early 2024 to August 2024, total assets showed a slight declining trend, ending near US$37.7 billion.

Shareholders’ Equity

Shareholders’ equity exhibited steady growth from about US$9.0 billion in August 2018 to a peak near US$15.8 billion by August 2022. This upward movement was relatively steady without significant volatility, indicating consistent value generation for shareholders. However, after August 2022, equity experienced a gradual decline and fluctuations, decreasing to approximately US$14.0 billion by early 2025. Despite this decline, equity remained relatively stable in the US$14 billion range during the last few quarters.

Financial Leverage

The financial leverage ratio displayed moderate variability throughout the observed quarters. Initially, the ratio remained between 2.5 and 2.9 from 2018 to early 2020, indicating moderate use of debt relative to equity. A notable spike occurred in May 2020, where leverage increased sharply to 3.89, likely reflecting increased liabilities or reduced equity during that quarter. Following this peak, leverage steadily declined back to lower levels around 2.6 to 2.7 from late 2020 onward, suggesting a reduction in relative debt levels or reinforcement of equity capital. The financial leverage ratio remained fairly stable in this lower range through the first quarter of 2025.

In summary, total assets and shareholders’ equity grew substantially over the multi-year period, with total assets experiencing significant expansion particularly around 2020. Equity growth was more consistent but showed signs of tapering in the later quarters. The financial leverage ratio indicates a temporary increase in leverage coinciding with the 2020 period, followed by a normalization toward more conservative levels. These patterns suggest the company navigated a period of expansion with increased asset base and shareholder value, while managing financial risk through eventual deleveraging.