Nike Inc. (NYSE:NKE)

The analysis of the quarterly financial ratios reveals several noteworthy trends over the periods observed.

Net Fixed Asset Turnover

The net fixed asset turnover ratio shows a general upward trend starting from a level of approximately 8.25 in mid-2019. It increases gradually through subsequent periods, peaking around 10.27 in early 2024 before stabilizing slightly below this peak towards mid-2025. This indicates an improvement in the efficiency of fixed asset utilization over time, suggesting enhanced operational performance or asset management.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

When including operating leases and right-of-use assets, the ratio starts at the same level as the previous measure in mid-2019 but shows a markedly different pattern. It declines sharply to about 4.59 by late 2019 and remains relatively stable, fluctuating between 4.7 and 6.65 subsequently. A slight increase is noticed toward early 2025, indicating some improvement in asset utilization when lease assets are accounted for, though the values remain significantly lower than the traditional net fixed asset turnover, reflecting the impact of lease capitalization on asset base.

Total Asset Turnover

The total asset turnover ratio initially drops from 1.65 in mid-2019 to a low point around 1.06 by mid-2020, suggesting a decrease in overall asset efficiency possibly due to the increased asset base or operational disruptions. Following this, the ratio recovers steadily, reaching about 1.40 by late 2023, before slightly declining again towards mid-2025. This recovery trend indicates improved effectiveness in generating revenue from total assets after the initial downturn.

Equity Turnover

The equity turnover ratio exhibits a declining trend from about 4.33 in mid-2019 to a low point approximately at 2.98 in mid-2022, implying a decrease in revenue generation relative to equity during this interval. Following this, there is a modest rebound to around 3.68 by late 2023 with minor fluctuations thereafter, settling near 3.41 by mid-2025. This pattern reflects fluctuations in how effectively the equity base is leveraged to generate sales or revenue.

Overall, the data suggest enhancements in fixed asset utilization efficiency over the long term, despite short-term variations related to changes in leased asset recognition and broader asset base impacts. The total asset turnover's dip and subsequent recovery may be associated with shifts in asset composition or external challenges, while the decline and partial recovery in equity turnover hint at variations in the firm's leverage or equity-based operational effectiveness over the periods observed.

The financial data demonstrates several important trends across the analysed periods. Revenues show a fluctuating pattern with notable dips and recoveries. Initially, revenues decreased from 9,948 million USD in August 2018 to 6,313 million USD in May 2020, reflecting a significant contraction. Following this trough, revenues generally recovered, peaking again around 13,388 million USD in November 2023, suggesting a period of growth and positive momentum. However, there is a subsequent decline to 11,269 million USD by February 2025, indicating some volatility and potential headwinds in recent quarters.

Property, plant, and equipment, net, displays a more stable and mildly declining trend over the same period. Values increased modestly from 4,487 million USD in August 2018 to approximately 5,153 million USD by November 2023, before showing a gradual decline to around 4,717 million USD by February 2025. This suggests a limited expansion or investment in fixed assets in recent years, possibly reflecting strategic asset management or divestitures.

The net fixed asset turnover ratio, which measures efficiency in using fixed assets to generate revenue, shows a generally upward trajectory over the observed periods. Beginning from a lower base, the ratio improved significantly from around 8.25 in early 2019 to values exceeding 10.00 from mid-2021 onwards. The consistent maintenance of this level above 10 indicates enhanced efficiency in asset utilization, meaning that each unit of fixed assets is generating increasing revenue, despite the flattening or slight decreases in asset investments.

Key insights:

1. Revenue volatility is evident with a sharp decline in early 2020, likely attributable to external shocks, followed by a robust recovery, and then a moderate decline in the latest periods.

2. Investments in fixed assets have not shown strong growth recently, with a peak around late 2023 followed by a gradual decline, indicating cautious capital expenditure or asset optimization efforts.

3. Improvements in net fixed asset turnover suggest the company has increased operational efficiency and is extracting more revenue per unit of fixed assets employed.

In summary, while revenue experiences some instability, asset management and operational efficiency show positive developments. The increased asset turnover ratio highlights effective utilization of the property, plant, and equipment, which could mitigate the impact of fluctuating revenues. Ongoing monitoring is advised to assess the sustainability of revenue trends and the adequacy of fixed asset investments to support future growth.

The financial data indicates noticeable fluctuations and gradual changes across various key performance metrics over the analyzed periods.

Revenues

Revenues generally exhibit a growth trend from August 2018 through November 2024, despite periodic declines. Starting at approximately $9,948 million in August 2018, revenues increased, peaking around $13,388 million in November 2023. Notable dips occurred around May 2020 at roughly $6,313 million, likely reflecting external disruptive factors during that period, followed by rapid recovery and subsequent upward momentum. From early 2022 through late 2023, revenues fluctuated around $12,000 to $13,000 million, evidencing sustained higher activity levels compared to earlier years.

Property, plant and equipment, net (including operating lease, right-of-use asset)

This asset base generally expanded from August 2018 to August 2019, moving from approximately $4,487 million to $7,447 million. Following this surge, the net value held relatively steady but showed signs of gradual reduction starting mid-2021 onward, declining from about $8,017 million in May 2021 to approximately $7,331 million by February 2025. These incremental decreases may suggest depreciation, asset disposals, or revaluations over time. The peak levels observed around mid-2019 to mid-2021 indicate a period of significant investment or reclassification of operating lease assets.

Net Fixed Asset Turnover (including operating lease, right-of-use asset)

Data points for this ratio begin around February 2019, showing an initial high ratio of 8.25, which then sharply declined to approximately 5.35 by May 2019. Subsequently, the ratio fluctuates within a narrower band between 4.59 and 6.65, reflecting varying efficiency in asset utilization. Notably, from mid-2020 onwards, the ratio stabilizes in the mid-6 range, peaking at 6.65 in November 2024. This trend suggests an improvement in how effectively the company's assets generate revenue after the initial adjustment period, possibly influenced by changes in asset base composition or operational efficiencies.

In summary, the revenue trajectory demonstrates robust growth with some volatility likely linked to broader economic conditions. Property and equipment assets remained elevated during peak investment phases before gently declining, while asset turnover ratios indicate recovering and sustained efficiency in asset utilization post-2019. These financial patterns collectively suggest adaptive strategies in asset management and revenue generation aligned with changing market circumstances.

The financial data reveals several notable trends over the examined periods.

Revenues

Revenues demonstrate a generally increasing trend with some fluctuations. Initially, from August 31, 2018, through May 31, 2019, revenues rose modestly from 9,948 million US dollars to 10,184 million US dollars. A slight dip occurred in November 30, 2019, and February 29, 2020, followed by a sharp decline to 6,313 million US dollars in May 31, 2020, likely indicating an adverse event or seasonal impact during this quarter. Post this drop, revenues resumed their upward trajectory, reaching 12,344 million US dollars by May 31, 2021, and peaking around 13,388 million US dollars by November 30, 2023. However, the last observed quarters show some volatility with revenues fluctuating between approximately 11,269 million and 12,606 million US dollars, suggesting potential market or operational variations.

Total Assets

Total assets steadily increased from 22,483 million US dollars at August 31, 2018, to a peak of 41,088 million US dollars by August 31, 2022. This steady rise indicates ongoing asset accumulation or investment during this period. However, subsequent periods show a gradual decline to approximately 37,793 million US dollars by February 28, 2025, reflecting possible asset disposals, impairments, or revaluations. The fluctuation suggests an active asset management approach, potentially aligning with strategic shifts or market conditions.

Total Asset Turnover Ratio

The ratio indicates how efficiently the company utilizes its assets to generate revenues. Data begins as available from February 28, 2019, with a turnover of 1.65, then declines steadily to a low of 1.06 by May 31, 2021. This decline suggests a period of decreased efficiency in asset use, possibly influenced by the rapid asset growth or external market challenges. From that low point onward, the ratio gradually recovers, increasing to approximately 1.40 by August 31, 2023, before a slight downward trend in the last periods, stabilizing just above 1.27 by February 28, 2025. This recovery indicates improved asset utilization, but the downward movement near the end may warrant monitoring for potential efficiency deterioration.

Revenues

Revenues show a fluctuating but generally upward trend over the observed period. Initial values start around 9,948 million US dollars in August 2018 and experience some volatility, notably a sharp decline to 6,313 million US dollars in May 2020, which may correlate with external economic disruptions. Following this dip, revenues recover steadily, peaking at 13,388 million US dollars in November 2023 before exhibiting a slight decline in the most recent periods to 11,269 million US dollars in February 2025.

Shareholders' Equity

Shareholders' equity exhibits a relatively steady increase over the timeframe analyzed. Starting at 8,992 million US dollars in August 2018, it shows consistent growth despite some minor fluctuations. The equity dips slightly in May 2020 to 8,055 million US dollars, aligning with the revenue decline during that period, but then resumes an upward trend, reaching approximately 14,037 million US dollars by November 2024. The final recorded values show a slight decrease to 14,007 million US dollars in February 2025, indicating minor recent contractions or adjustments.

Equity Turnover

The equity turnover ratio, available from February 2019 onward, demonstrates a declining trend at the outset, decreasing from about 4.33 in early 2019 to a low of around 2.98 by August 2021. This indicates a reduction in the efficiency of generating revenue from equity during this period. Subsequently, the ratio exhibits a recovery phase, climbing back up to 3.68 by November 2023 and stabilizing slightly lower in early 2025 near 3.41. This pattern suggests an initial period of declining asset utilization efficiency followed by improved operational performance or asset management.

Overall Insights

The data indicates a significant impact on the company's operational performance around the May 2020 period, which is reflected across revenues, equity, and turnover ratios. This period corresponds with a clear downturn, followed by a recovery phase characterized by increasing revenues and equity values, as well as a rebound in equity turnover ratio, suggesting effective response measures and restoration of growth momentum. The slight declines in recent quarters may warrant further investigation to assess contributing factors and sustain growth trajectories.