Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Nike Inc., solvency ratios
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).
- Debt to Equity
- The debt to equity ratio shows a consistent decline from 1.2 in 2020 to 0.6 in 2025, indicating a gradual reduction in leverage relative to shareholder equity. When including operating lease liabilities, the ratio starts at 1.62 in 2020 and decreases to 0.83 in 2025, showing a similar downward trend but at higher levels due to the inclusion of lease obligations.
- Debt to Capital
- The debt to capital ratio follows a decreasing trend from 0.55 in 2020 to 0.38 in 2025, illustrating a reduction in the proportion of debt financing relative to the total capital structure. Including operating lease liabilities, it declines from 0.62 to 0.45 over the same period, mirroring the overall decline but accounting for additional liabilities.
- Debt to Assets
- A downward trend is observed in the debt to assets ratio, falling from 0.31 in 2020 to 0.22 in 2025, which indicates that the company's debt burden relative to its asset base is diminishing. Including operating lease liabilities raises these ratios, but the direction of change remains consistent, moving from 0.42 to 0.3.
- Financial Leverage
- Financial leverage decreases from 3.89 in 2020 to a low near 2.64 in 2022, remains relatively stable through 2024, and slightly increases to 2.77 in 2025. This suggests the company is maintaining lower leverage levels compared to 2020 with minor fluctuations in later years.
- Interest Coverage
- The interest coverage ratio generally improves from 20.12 in 2020 to a peak of 25.91 in 2024, indicating stronger ability to meet interest obligations. However, in 2025, it sharply declines to 14.08, signalling a notably decreased capacity to cover interest expenses that year.
- Fixed Charge Coverage
- Fixed charge coverage ratio shows a marked improvement from 5.01 in 2020 to a range around 8.5 between 2021 and 2024, reflecting enhanced capacity to cover fixed financial obligations. In 2025, this ratio declines significantly to 5.05, similar to the level at the start of the period.
Overall, the data reveals a clear trend of decreasing leverage and debt burden relative to equity, capital, and assets over the six-year period, suggesting a strengthening balance sheet. Profitability related to interest and fixed charges coverage improves steadily until 2024 but exhibits a notable decline in 2025, which may warrant further investigation into potential causes such as increased interest expense or decreased earnings in that year.
Debt Ratios
Coverage Ratios
Debt to Equity
Nike Inc., debt to equity 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) | |||||||
| Current portion of long-term debt | —) | 1,000) | —) | 500) | —) | 3) | |
| Notes payable | 5) | 6) | 6) | 10) | 2) | 248) | |
| Long-term debt, excluding current portion | 7,961) | 7,903) | 8,927) | 8,920) | 9,413) | 9,406) | |
| Total debt | 7,966) | 8,909) | 8,933) | 9,430) | 9,415) | 9,657) | |
| Shareholders’ equity | 13,213) | 14,430) | 14,004) | 15,281) | 12,767) | 8,055) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.60 | 0.62 | 0.64 | 0.62 | 0.74 | 1.20 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| lululemon athletica inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Debt to Equity, Sector | |||||||
| Consumer Durables & Apparel | — | 0.48 | 0.52 | 0.52 | 0.61 | 0.97 | |
| Debt to Equity, Industry | |||||||
| Consumer Discretionary | — | 1.10 | 1.34 | 1.51 | 1.50 | 2.32 | |
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 2025 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 7,966 ÷ 13,213 = 0.60
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a gradual decline from 2020 to 2025. Beginning at $9,657 million in 2020, it slightly decreased to $9,415 million in 2021 and remained relatively stable around $9,400 million in 2022. A more pronounced decrease is observed from 2023 onwards, dropping to $8,933 million and continuing downward to $7,966 million by 2025. This indicates a consistent effort to reduce debt levels over the analyzed period.
- Shareholders’ Equity
- Shareholders' equity showed a significant upward trend from 2020 to 2022, rising from $8,055 million to $15,281 million. However, following this peak, it experienced a slight decline, reaching $14,004 million in 2023, before slightly recovering to $14,430 million in 2024 and then falling again to $13,213 million in 2025. Overall, the equity base expanded substantially over the six-year period, although some fluctuations were evident post-2022.
- Debt to Equity Ratio
- The debt to equity ratio consistently declined from 1.2 in 2020 to 0.6 in 2025. This decreasing ratio reflects the combined effects of reducing total debt and increasing shareholders’ equity, indicating an improvement in the company's financial leverage and capital structure. The trend suggests a strengthening of the equity position relative to debt, potentially signaling enhanced financial stability.
Debt to Equity (including Operating Lease Liability)
Nike Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current portion of long-term debt | —) | 1,000) | —) | 500) | —) | 3) | |
| Notes payable | 5) | 6) | 6) | 10) | 2) | 248) | |
| Long-term debt, excluding current portion | 7,961) | 7,903) | 8,927) | 8,920) | 9,413) | 9,406) | |
| Total debt | 7,966) | 8,909) | 8,933) | 9,430) | 9,415) | 9,657) | |
| Current portion of operating lease liabilities | 502) | 477) | 425) | 420) | 467) | 445) | |
| Operating lease liabilities, excluding current portion | 2,550) | 2,566) | 2,786) | 2,777) | 2,931) | 2,913) | |
| Total debt (including operating lease liability) | 11,018) | 11,952) | 12,144) | 12,627) | 12,813) | 13,015) | |
| Shareholders’ equity | 13,213) | 14,430) | 14,004) | 15,281) | 12,767) | 8,055) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.83 | 0.83 | 0.87 | 0.83 | 1.00 | 1.62 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| lululemon athletica inc. | 0.36 | 0.33 | 0.34 | 0.32 | 0.31 | 0.38 | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Consumer Durables & Apparel | — | 0.72 | 0.77 | 0.75 | 0.89 | 1.37 | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Consumer Discretionary | — | 1.39 | 1.69 | 1.90 | 1.87 | 2.78 | |
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 2025 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 11,018 ÷ 13,213 = 0.83
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt decreases consistently from 13,015 million US dollars in May 2020 to 11,018 million US dollars in May 2025. This decline suggests a steady reduction in the company's leveraged liabilities over the period, which may indicate effective debt management or repayment strategies.
- Shareholders’ Equity
- Shareholders' equity shows an overall increasing trend but with some fluctuations. It rises significantly from 8,055 million US dollars in May 2020 to a peak of 15,281 million US dollars in May 2022. After peaking, equity declines to 14,004 million US dollars in May 2023, slightly recovers in May 2024 to 14,430 million US dollars, and falls again to 13,213 million US dollars by May 2025. This pattern indicates that while the company has generally built equity over time, there have been recent periods of equity reduction, possibly due to losses, dividend distributions, or other capital adjustments.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The debt to equity ratio shows a marked improvement from 1.62 in May 2020 to 1.00 in May 2021, representing a significant reduction in financial leverage. From May 2021 onward, the ratio continues to decline and stabilizes around 0.83 to 0.87 through May 2025. This steady lower leverage implies a stronger equity base relative to debt, reducing financial risk and potentially enhancing the company's credit profile.
Debt to Capital
Nike Inc., debt to capital 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) | |||||||
| Current portion of long-term debt | —) | 1,000) | —) | 500) | —) | 3) | |
| Notes payable | 5) | 6) | 6) | 10) | 2) | 248) | |
| Long-term debt, excluding current portion | 7,961) | 7,903) | 8,927) | 8,920) | 9,413) | 9,406) | |
| Total debt | 7,966) | 8,909) | 8,933) | 9,430) | 9,415) | 9,657) | |
| Shareholders’ equity | 13,213) | 14,430) | 14,004) | 15,281) | 12,767) | 8,055) | |
| Total capital | 21,179) | 23,339) | 22,937) | 24,711) | 22,182) | 17,712) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.38 | 0.38 | 0.39 | 0.38 | 0.42 | 0.55 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| lululemon athletica inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Debt to Capital, Sector | |||||||
| Consumer Durables & Apparel | — | 0.32 | 0.34 | 0.34 | 0.38 | 0.49 | |
| Debt to Capital, Industry | |||||||
| Consumer Discretionary | — | 0.52 | 0.57 | 0.60 | 0.60 | 0.70 | |
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 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 7,966 ÷ 21,179 = 0.38
2 Click competitor name to see calculations.
Over the analyzed period, the total debt of the company shows a general decreasing trend. Starting from a value of 9,657 million USD in 2020, the total debt gradually reduced to 7,966 million USD by 2025. The decline is most notable in the last reported year, suggesting a strategic effort to lower debt levels.
Total capital presents a different pattern, initially increasing from 17,712 million USD in 2020 to a peak of 24,711 million USD in 2022. After this peak, total capital decreases steadily to 21,179 million USD by 2025. This fluctuation indicates periods of capital expansion followed by a moderate reduction.
The debt to capital ratio reflects the relationship between debt and the overall capital structure. This ratio decreases sharply from 0.55 in 2020 to 0.42 in 2021, then continues to decline more modestly, stabilizing around 0.38 from 2022 onward through 2025. This pattern indicates improved leverage management, with debt becoming a smaller proportion of total capital over time, enhancing financial stability.
- Total Debt
- Decreases from 9,657 million USD in 2020 to 7,966 million USD in 2025, indicating active debt reduction strategies.
- Total Capital
- Increases from 17,712 million USD in 2020 to a high of 24,711 million USD in 2022, followed by a moderate decline to 21,179 million USD by 2025.
- Debt to Capital Ratio
- Falls from 0.55 in 2020 to stabilize around 0.38 between 2022 and 2025, reflecting stronger capital structure and reduced reliance on debt.
Debt to Capital (including Operating Lease Liability)
Nike Inc., debt to capital (including operating lease liability) 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) | |||||||
| Current portion of long-term debt | —) | 1,000) | —) | 500) | —) | 3) | |
| Notes payable | 5) | 6) | 6) | 10) | 2) | 248) | |
| Long-term debt, excluding current portion | 7,961) | 7,903) | 8,927) | 8,920) | 9,413) | 9,406) | |
| Total debt | 7,966) | 8,909) | 8,933) | 9,430) | 9,415) | 9,657) | |
| Current portion of operating lease liabilities | 502) | 477) | 425) | 420) | 467) | 445) | |
| Operating lease liabilities, excluding current portion | 2,550) | 2,566) | 2,786) | 2,777) | 2,931) | 2,913) | |
| Total debt (including operating lease liability) | 11,018) | 11,952) | 12,144) | 12,627) | 12,813) | 13,015) | |
| Shareholders’ equity | 13,213) | 14,430) | 14,004) | 15,281) | 12,767) | 8,055) | |
| Total capital (including operating lease liability) | 24,231) | 26,382) | 26,148) | 27,908) | 25,580) | 21,070) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.45 | 0.45 | 0.46 | 0.45 | 0.50 | 0.62 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| lululemon athletica inc. | 0.27 | 0.25 | 0.25 | 0.24 | 0.24 | 0.27 | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Consumer Durables & Apparel | — | 0.42 | 0.44 | 0.43 | 0.47 | 0.58 | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Consumer Discretionary | — | 0.58 | 0.63 | 0.65 | 0.65 | 0.74 | |
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 2025 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 11,018 ÷ 24,231 = 0.45
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- There is a consistent decline in total debt from May 31, 2020, to May 31, 2025. The amount decreased from $13,015 million in 2020 to $11,018 million in 2025, reflecting a reduction of approximately 15.3% over the six-year period. The decline suggests a strategic effort to reduce leverage or repay obligations gradually.
- Total Capital (Including Operating Lease Liability)
- Total capital shows an overall increasing trend from 2020 through 2025, peaking in the year ending May 31, 2022, at $27,908 million. After reaching this peak, total capital decreased in subsequent years, ending at $24,231 million in 2025. This pattern indicates initial capital expansion followed by moderate contraction or revaluation in the later years.
- Debt to Capital Ratio (Including Operating Lease Liability)
- The debt to capital ratio demonstrates a significant reduction from 0.62 in 2020 to 0.45 in 2022, indicating a notable improvement in the company’s capital structure by lowering debt levels relative to total capital. From 2022 to 2025, the ratio stabilizes around 0.45, implying that after the initial deleveraging phase, the company maintained a consistent balance between debt and capital.
Debt to Assets
Nike Inc., debt to assets calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current portion of long-term debt | —) | 1,000) | —) | 500) | —) | 3) | |
| Notes payable | 5) | 6) | 6) | 10) | 2) | 248) | |
| Long-term debt, excluding current portion | 7,961) | 7,903) | 8,927) | 8,920) | 9,413) | 9,406) | |
| Total debt | 7,966) | 8,909) | 8,933) | 9,430) | 9,415) | 9,657) | |
| Total assets | 36,579) | 38,110) | 37,531) | 40,321) | 37,740) | 31,342) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.22 | 0.23 | 0.24 | 0.23 | 0.25 | 0.31 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| lululemon athletica inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Debt to Assets, Sector | |||||||
| Consumer Durables & Apparel | — | 0.20 | 0.21 | 0.21 | 0.22 | 0.28 | |
| Debt to Assets, Industry | |||||||
| Consumer Discretionary | — | 0.32 | 0.34 | 0.35 | 0.36 | 0.41 | |
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 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 7,966 ÷ 36,579 = 0.22
2 Click competitor name to see calculations.
- Total Debt
- The total debt demonstrates a consistent downward trend over the analyzed period. Starting from $9,657 million in 2020, it gradually declines to $7,966 million by 2025. The most notable decreases occur between 2023 and 2025, indicating an active reduction in debt levels in recent years.
- Total Assets
- Total assets initially increase from $31,342 million in 2020 to a peak of $40,321 million in 2022. However, following this peak, there is a downward trend as assets decline to $36,579 million by 2025. This suggests a contraction in the asset base after 2022, which may reflect divestitures, depreciation, or other adjustments.
- Debt to Assets Ratio
- The debt to assets ratio exhibits a steady decline from 0.31 in 2020 to 0.22 in 2025. This decreasing ratio is consistent with the reduction in total debt combined with the changes in total assets. It indicates relative deleveraging, with the company lowering its debt burden in relation to its asset base over the five-year span.
Debt to Assets (including Operating Lease Liability)
Nike Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current portion of long-term debt | —) | 1,000) | —) | 500) | —) | 3) | |
| Notes payable | 5) | 6) | 6) | 10) | 2) | 248) | |
| Long-term debt, excluding current portion | 7,961) | 7,903) | 8,927) | 8,920) | 9,413) | 9,406) | |
| Total debt | 7,966) | 8,909) | 8,933) | 9,430) | 9,415) | 9,657) | |
| Current portion of operating lease liabilities | 502) | 477) | 425) | 420) | 467) | 445) | |
| Operating lease liabilities, excluding current portion | 2,550) | 2,566) | 2,786) | 2,777) | 2,931) | 2,913) | |
| Total debt (including operating lease liability) | 11,018) | 11,952) | 12,144) | 12,627) | 12,813) | 13,015) | |
| Total assets | 36,579) | 38,110) | 37,531) | 40,321) | 37,740) | 31,342) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.30 | 0.31 | 0.32 | 0.31 | 0.34 | 0.42 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| lululemon athletica inc. | 0.21 | 0.20 | 0.19 | 0.18 | 0.19 | 0.23 | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Consumer Durables & Apparel | — | 0.30 | 0.31 | 0.30 | 0.32 | 0.40 | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Consumer Discretionary | — | 0.41 | 0.43 | 0.44 | 0.44 | 0.49 | |
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 2025 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 11,018 ÷ 36,579 = 0.30
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt decreased progressively from 13,015 million US dollars in 2020 to 11,018 million US dollars in 2025. This indicates a consistent reduction in the company's leverage, with the total debt dropping by approximately 15% over the six-year period.
- Total Assets
- Total assets increased significantly from 31,342 million US dollars in 2020, peaking at 40,321 million US dollars in 2022. After this peak, assets declined to 36,579 million US dollars by 2025. This trend suggests an initial period of asset growth followed by a moderate contraction or reallocation of resources in the latter years.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio reduced steadily from 0.42 in 2020 to 0.30 in 2025. This decline reflects an improvement in the company's financial stability, as its debt constitutes a smaller proportion of total assets over time. The ratio's decrease aligns with the observed reduction in total debt and the increase, followed by a slight decline, in total assets.
Financial Leverage
Nike Inc., financial leverage 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) | |||||||
| Total assets | 36,579) | 38,110) | 37,531) | 40,321) | 37,740) | 31,342) | |
| Shareholders’ equity | 13,213) | 14,430) | 14,004) | 15,281) | 12,767) | 8,055) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.77 | 2.64 | 2.68 | 2.64 | 2.96 | 3.89 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| lululemon athletica inc. | 1.76 | 1.68 | 1.78 | 1.80 | 1.64 | 1.68 | |
| Financial Leverage, Sector | |||||||
| Consumer Durables & Apparel | — | 2.42 | 2.51 | 2.51 | 2.74 | 3.46 | |
| Financial Leverage, Industry | |||||||
| Consumer Discretionary | — | 3.44 | 3.95 | 4.32 | 4.22 | 5.62 | |
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 2025 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 36,579 ÷ 13,213 = 2.77
2 Click competitor name to see calculations.
- Total Assets
- The total assets showed a growth trend from 31,342 million USD in May 2020 to a peak of 40,321 million USD in May 2022. However, following this peak, total assets declined to 37,531 million USD in May 2023 and fluctuated slightly around this level, ending at 36,579 million USD in May 2025. This indicates an initial expansion phase followed by a period of asset contraction or stabilization over the recent years.
- Shareholders’ Equity
- Shareholders’ equity demonstrated a consistent increase from 8,055 million USD in May 2020 to a high of 15,281 million USD in May 2022. After this peak, equity decreased to 14,004 million USD in May 2023 and further fluctuated, reaching 13,213 million USD by May 2025. The trend suggests considerable equity growth through 2022, likely reflecting profitability or capital infusion, followed by some decline or distribution in subsequent years.
- Financial Leverage
- Financial leverage, defined as the ratio of total assets to shareholders’ equity, declined steadily from 3.89 in May 2020 to 2.64 by May 2022. This reduction indicates decreasing reliance on debt relative to equity or improved capitalization. Beyond 2022, the ratio slightly increased to 2.77 by May 2025, suggesting a marginal increase in financial leverage but remaining well below the 2020 level, highlighting greater financial stability or prudent capital structure management over the period.
Interest Coverage
Nike Inc., interest coverage 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 income | 3,219) | 5,700) | 5,070) | 6,046) | 5,727) | 2,539) | |
| Add: Income tax expense | 666) | 1,000) | 1,131) | 605) | 934) | 348) | |
| Add: Interest expense | 297) | 269) | 291) | 299) | 296) | 151) | |
| Earnings before interest and tax (EBIT) | 4,182) | 6,969) | 6,492) | 6,950) | 6,957) | 3,038) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 14.08 | 25.91 | 22.31 | 23.24 | 23.50 | 20.12 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| lululemon athletica inc. | — | — | — | — | — | — | |
| Interest Coverage, Sector | |||||||
| Consumer Durables & Apparel | — | 34.00 | 26.89 | 27.71 | 26.27 | 26.06 | |
| Interest Coverage, Industry | |||||||
| Consumer Discretionary | — | 15.00 | 12.23 | 9.30 | 13.23 | 7.73 | |
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 2025 Calculation
Interest coverage = EBIT ÷ Interest expense
= 4,182 ÷ 297 = 14.08
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT exhibits a significant increase from 3,038 million USD in 2020 to a peak of 6,957 million USD in 2021, essentially more than doubling within one year. This elevated level is maintained in 2022 with a marginal decrease to 6,950 million USD. However, a declining trend is observed thereafter, with EBIT falling to 6,492 million USD in 2023, rebounding slightly to 6,969 million USD in 2024, and then sharply declining to 4,182 million USD by 2025. The sharp drop in 2025 represents a considerable reduction from the previous years' higher profitability.
- Interest expense
- Interest expense demonstrates a notable increase from 151 million USD in 2020 to approximately 296-299 million USD during the years 2021 to 2022, and remains relatively stable around this level through to 2025. Minor fluctuations are visible, yet the interest expense essentially doubles compared to 2020 and then sustains close to this elevated amount during the remaining period.
- Interest coverage ratio
- The interest coverage ratio starts at a relatively high level of 20.12 in 2020, increases steadily through 2021 to peak at 25.91 in 2024, indicating strong ability to cover interest obligations with operating earnings. However, in 2025, there is a marked decline to 14.08, which suggests a reduction in the buffer between EBIT and interest expense. Although still above a commonly accepted minimum threshold, this decline may indicate decreasing financial cushion and reduced operational profitability to cover interest costs effectively.
Fixed Charge Coverage
Nike Inc., fixed charge coverage 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 income | 3,219) | 5,700) | 5,070) | 6,046) | 5,727) | 2,539) | |
| Add: Income tax expense | 666) | 1,000) | 1,131) | 605) | 934) | 348) | |
| Add: Interest expense | 297) | 269) | 291) | 299) | 296) | 151) | |
| Earnings before interest and tax (EBIT) | 4,182) | 6,969) | 6,492) | 6,950) | 6,957) | 3,038) | |
| Add: Operating lease costs | 663) | 618) | 585) | 593) | 589) | 569) | |
| Earnings before fixed charges and tax | 4,845) | 7,587) | 7,077) | 7,543) | 7,546) | 3,607) | |
| Interest expense | 297) | 269) | 291) | 299) | 296) | 151) | |
| Operating lease costs | 663) | 618) | 585) | 593) | 589) | 569) | |
| Fixed charges | 960) | 887) | 876) | 892) | 885) | 720) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 5.05 | 8.55 | 8.08 | 8.46 | 8.53 | 5.01 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| lululemon athletica inc. | 8.60 | 8.69 | 6.42 | 7.19 | 5.23 | 6.09 | |
| Fixed Charge Coverage, Sector | |||||||
| Consumer Durables & Apparel | — | 8.59 | 7.72 | 8.21 | 7.94 | 5.22 | |
| Fixed Charge Coverage, Industry | |||||||
| Consumer Discretionary | — | 5.95 | 4.95 | 3.65 | 5.60 | 3.69 | |
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 2025 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 4,845 ÷ 960 = 5.05
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax showed a substantial increase from 3,607 million USD in 2020 to 7,546 million USD in 2021, maintaining a level close to 7,543 million USD in 2022. However, a decline is observed in 2023 with earnings decreasing to 7,077 million USD. The earnings recovered slightly in 2024 to 7,587 million USD but then dropped significantly to 4,845 million USD in 2025. Overall, the period exhibits considerable volatility, with an initial strong growth phase followed by fluctuations and a notable decrease in the latest year.
- Fixed charges
- The fixed charges have shown a general rising trend over the six-year period. Starting at 720 million USD in 2020, these charges increased to 960 million USD by 2025. The growth was steady though incremental year over year, with a small dip between 2022 and 2023, followed by slight increases thereafter.
- Fixed charge coverage ratio
- The fixed charge coverage ratio improved sharply from 5.01 in 2020 to a peak of 8.53 in 2021 and remained relatively stable through 2024, fluctuating slightly between 8.08 and 8.55. In 2025, this ratio declined significantly to 5.05, indicating a reduced ability to cover fixed charges despite relatively high earnings in prior years. This suggests that while the company managed to robustly cover its fixed charges in the earlier years, the coverage weakened substantially in the latest period in correlation with the drop in earnings before fixed charges and tax.