Nike Inc. (NYSE:NKE)

Net fixed asset turnover

The net fixed asset turnover ratio demonstrates a generally increasing trend from 2019 to 2024. Starting at 8.25 in 2019, it declines slightly in 2020 to 7.69, then rises steadily each year to reach 10.27 in 2024. This indicates improved efficiency in generating sales from fixed assets over the period.

Net fixed asset turnover including operating lease, right-of-use asset

This ratio shows a different pattern, with a significant drop from 8.25 in 2019 to 4.7 in 2020. Following that sharp decline, the ratio increases moderately over the next four years, reaching 6.65 in 2024. This suggests an adjustment in the asset base due to lease accounting changes, affecting turnover metrics, yet with gradual improvement afterward.

Total asset turnover

The total asset turnover ratio experiences a noticeable decrease from 1.65 in 2019 to 1.19 in 2020 and remains relatively stable around 1.16 to 1.18 through 2022. However, there is a recovery in 2023 to 1.36, followed by a slight dip to 1.35 in 2024. This pattern reflects initial challenges in using total assets efficiently during 2020 and 2021, with improved asset utilization in the more recent years.

Equity turnover

Equity turnover presents a fluctuating trend over the period. It begins at 4.33 in 2019, increases to 4.64 in 2020, then decreases significantly in 2021 and 2022 to 3.49 and 3.06 respectively. Subsequently, it recovers in 2023 to 3.66 but slightly declines again to 3.56 in 2024. This variability suggests changes in sales generation efficiency relative to the equity base, influenced by broader operational and financial factors.

Revenues

Revenues showed a moderate decline from 39,117 million USD in May 2019 to 37,403 million USD in May 2020. Following this dip, revenues rebounded strongly, increasing to 44,538 million USD in May 2021 and continuing an upward trajectory to reach 51,217 million USD in May 2023. The revenue growth stabilized between May 2023 and May 2024, with a marginal increase to 51,362 million USD, indicating a plateau phase after several years of growth.

Property, plant and equipment, net

The net value of property, plant, and equipment demonstrated relative stability over the period. Starting at 4,744 million USD in May 2019, the value increased slightly to 4,866 million USD in May 2020 and peaked at 5,081 million USD in May 2023. A slight decline was observed in May 2024, down to 5,000 million USD. Overall, the asset base maintained consistency with minor fluctuations, suggesting steady investment in fixed assets.

Net fixed asset turnover (ratio)

The net fixed asset turnover ratio exhibited notable improvement throughout the period. From 8.25 in May 2019, the ratio declined marginally to 7.69 in May 2020, aligning with the temporary reduction in revenues. Subsequently, it increased significantly to 9.08 in May 2021 and continued to rise steadily each year, reaching 10.27 in May 2024. This upward trend suggests enhanced efficiency in utilizing fixed assets to generate revenues over time.

The financial data reveals several key trends over the six-year period under review. Revenues exhibit a generally upward trajectory, with a notable dip in 2020 followed by a consistent recovery and growth from 2021 through 2024. Specifically, revenues decreased from approximately 39.1 billion US dollars in 2019 to 37.4 billion in 2020, likely reflecting external economic challenges during that period, before rebounding to over 51 billion US dollars by 2024.

Regarding Property, Plant, and Equipment (PPE), net values demonstrate an initial sharp increase from 4.7 billion US dollars in 2019 to nearly 8 billion in 2020 and 2021. This elevated level remains relatively stable with minor fluctuations through 2024, indicating substantial investments or revaluations during the early period, followed by maintenance of asset levels in subsequent years.

The net fixed asset turnover ratio, which measures efficiency in the use of fixed assets to generate revenue, shows a distinct decline in 2020, dropping from 8.25 to 4.7. This corresponds with the increase in PPE and the concurrent revenue dip observed. Subsequently, the ratio gradually recovers each year, rising to 6.65 by 2024. While still below the 2019 peak, this improvement suggests enhanced operational efficiency and better utilization of fixed assets over time.

Revenue Trends

Initial decline during the 2020 period followed by steady growth into 2024.

Property, Plant, and Equipment (PPE)

Significant increase between 2019 and 2020, with stable levels thereafter indicating sustained capital investment or asset revaluation.

Net Fixed Asset Turnover Ratio

Substantial drop in 2020 reflecting decreased efficiency, followed by gradual improvement through 2024, signaling recovery in operational performance.

Overall, the data suggests the company faced a period of reduced revenue efficiency and increased asset investment in 2020, followed by a phase of operational recovery and revenue growth while maintaining asset base stability. The gradual improvement in fixed asset turnover is a positive indicator of enhanced asset productivity in the more recent years.

The analysis of the financial data over the six-year period reveals several noteworthy trends and changes in the company's financial position and performance.

Revenues

The revenue figures exhibit a general upward trend from 2019 to 2024. Starting at 39,117 million USD in 2019, revenues experienced a slight decline in 2020 to 37,403 million USD, potentially influenced by external factors impacting the market. From 2020 onward, revenues increased steadily, reaching 51,217 million USD in 2023 and slightly increasing to 51,362 million USD in 2024. This growth indicates a recovery and expansion phase in the company's operations following the 2020 dip.

Total Assets

Total assets initially rose significantly from 23,717 million USD in 2019 to a peak of 40,321 million USD in 2022. This increase reflects the company's investment in assets, possibly to support its growing operations. However, after 2022, total assets declined to 37,531 million USD in 2023 and experienced a marginal increase to 38,110 million USD in 2024. The reduction might suggest asset optimization or divestitures during this later period.

Total Asset Turnover

The total asset turnover ratio, which measures the efficiency in using assets to generate revenue, has demonstrated a notable decrease from 1.65 in 2019 to approximately 1.16-1.19 during the 2020-2022 period. This decline aligns with the significant increase in assets without corresponding growth in revenues during that time. Subsequently, the ratio improved to around 1.35-1.36 in 2023 and 2024, indicating enhanced efficiency in asset utilization as revenues grew and assets stabilized or diminished slightly.

In summary, the revenue trajectory indicates resilience and growth over the reviewed period, especially post-2020. The asset base expanded substantially until 2022, followed by a moderate decrease, suggesting strategic asset management. The total asset turnover ratio’s fluctuations reveal initial inefficiencies that improved in the later years, reflecting better alignment between asset investments and revenue generation. Overall, the data depict a company that has adapted its asset use to sustain revenue growth and improve operational efficiency over time.

The financial data reveals several key trends over the six-year period ending May 31, 2024.

Revenues

There was a decline in revenues from 39,117 million USD in 2019 to 37,403 million USD in 2020. However, from 2020 onwards, revenues exhibited a consistent upward trend, increasing steadily each year and peaking at 51,362 million USD in 2024. This represents a significant recovery and growth momentum post-2020.

Shareholders’ equity

Shareholders’ equity showed a decreasing trend from 9,040 million USD in 2019 to 8,055 million USD in 2020. Following this decline, equity increased substantially to reach a high of 15,281 million USD in 2022. After 2022, equity slightly contracted to 14,004 million USD in 2023 before a modest rise to 14,430 million USD in 2024. Overall, the equity levels demonstrate recovery and expansion despite some variability in the latter years.

Equity turnover ratio

The equity turnover ratio was relatively high in 2019 and 2020, at 4.33 and 4.64 respectively, indicating effective use of equity to generate revenues. Starting in 2021, the ratio declined notably to 3.49, then further dropped to 3.06 in 2022. It showed a slight recovery in 2023 to 3.66, before stabilizing somewhat at 3.56 in 2024. The reduction in equity turnover corresponds with the increase in equity, suggesting a slower pace of revenue generation relative to equity expansion in recent years.

In summary, the data indicates a challenging period in 2020 followed by strong revenue growth and equity accumulation. The decline in equity turnover ratio after 2020 highlights a shift where equity has grown faster than revenues, potentially reflecting investments or retained earnings expansion. The company appears to have recovered from early setbacks and is maintaining growth, though with a more conservative use of equity as reflected in the turnover ratio.