Analysis of Profitability Ratios
Profitability ratios measure the company’s ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Nike Inc., profitability ratios
Based on: 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21), 10-K (filing date: 2015-07-23).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Nike Inc.’s gross profit margin ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Nike Inc.’s operating profit margin ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Nike Inc.’s net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Nike Inc.’s ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Nike Inc.’s ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020. |
Gross Profit Margin
Nike Inc., gross profit margin calculation, comparison to benchmarks
| May 31, 2020 | May 31, 2019 | May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross profit | 16,241 | 17,474 | 15,956 | 15,312 | 14,971 | 14,067 | |
| Revenues | 37,403 | 39,117 | 36,397 | 34,350 | 32,376 | 30,601 | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 43.42% | 44.67% | 43.84% | 44.58% | 46.24% | 45.97% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Colgate-Palmolive Co. | 60.82% | 59.42% | 59.39% | 60.05% | 60.04% | — | |
| Estée Lauder Cos. Inc. | 75.15% | 77.21% | 79.22% | 79.39% | 80.63% | 80.51% | |
| Kimberly-Clark Corp. | 35.64% | 32.71% | 30.28% | 35.89% | 36.54% | — | |
Based on: 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21), 10-K (filing date: 2015-07-23).
1 2020 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 16,241 ÷ 37,403 = 43.42%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Nike Inc.’s gross profit margin ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020. |
Operating Profit Margin
Nike Inc., operating profit margin calculation, comparison to benchmarks
| May 31, 2020 | May 31, 2019 | May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income | 3,115 | 4,772 | 4,445 | 4,749 | 4,502 | 4,175 | |
| Revenues | 37,403 | 39,117 | 36,397 | 34,350 | 32,376 | 30,601 | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 8.33% | 12.20% | 12.21% | 13.83% | 13.91% | 13.64% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Colgate-Palmolive Co. | 23.59% | 22.65% | 23.76% | 23.22% | 25.25% | — | |
| Estée Lauder Cos. Inc. | 4.24% | 15.56% | 15.00% | 14.31% | 14.30% | 14.90% | |
| Kimberly-Clark Corp. | 16.95% | 16.21% | 12.06% | 18.07% | 18.22% | — | |
| Operating Profit Margin, Sector | |||||||
| Personal Goods | 12.43% | 15.47% | 14.77% | 16.68% | 17.22% | — | |
| Operating Profit Margin, Industry | |||||||
| Consumer Goods | 15.48% | 13.12% | 13.83% | 15.13% | 14.25% | — | |
Based on: 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21), 10-K (filing date: 2015-07-23).
1 2020 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × 3,115 ÷ 37,403 = 8.33%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Nike Inc.’s operating profit margin ratio deteriorated from 2018 to 2019 and from 2019 to 2020. |
Net Profit Margin
Nike Inc., net profit margin calculation, comparison to benchmarks
| May 31, 2020 | May 31, 2019 | May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 2,539 | 4,029 | 1,933 | 4,240 | 3,760 | 3,273 | |
| Revenues | 37,403 | 39,117 | 36,397 | 34,350 | 32,376 | 30,601 | |
| Profitability Ratio | |||||||
| Net profit margin1 | 6.79% | 10.30% | 5.31% | 12.34% | 11.61% | 10.70% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Colgate-Palmolive Co. | 16.36% | 15.08% | 15.44% | 13.10% | 16.06% | — | |
| Estée Lauder Cos. Inc. | 4.79% | 12.01% | 8.10% | 10.56% | 9.90% | 10.10% | |
| Kimberly-Clark Corp. | 12.29% | 11.69% | 7.63% | 12.48% | 11.90% | — | |
| Net Profit Margin, Sector | |||||||
| Personal Goods | 9.47% | 11.73% | 8.15% | 12.26% | 12.31% | — | |
| Net Profit Margin, Industry | |||||||
| Consumer Goods | 11.43% | 8.77% | 11.59% | 8.53% | 12.03% | — | |
Based on: 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21), 10-K (filing date: 2015-07-23).
1 2020 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 2,539 ÷ 37,403 = 6.79%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Nike Inc.’s net profit margin ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level. |
Return on Equity (ROE)
Nike Inc., ROE calculation, comparison to benchmarks
| May 31, 2020 | May 31, 2019 | May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 2,539 | 4,029 | 1,933 | 4,240 | 3,760 | 3,273 | |
| Shareholders’ equity | 8,055 | 9,040 | 9,812 | 12,407 | 12,258 | 12,707 | |
| Profitability Ratio | |||||||
| ROE1 | 31.52% | 44.57% | 19.70% | 34.17% | 30.67% | 25.76% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Colgate-Palmolive Co. | 362.72% | 2,023.08% | — | — | — | — | |
| Estée Lauder Cos. Inc. | 17.38% | 40.70% | 23.63% | 28.49% | 31.20% | 29.89% | |
| Kimberly-Clark Corp. | 375.72% | — | — | 362.16% | — | — | |
| ROE, Sector | |||||||
| Personal Goods | 61.91% | 76.52% | 48.55% | 56.40% | 61.23% | — | |
| ROE, Industry | |||||||
| Consumer Goods | 31.95% | 26.80% | 34.61% | 25.11% | 34.45% | — | |
Based on: 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21), 10-K (filing date: 2015-07-23).
1 2020 Calculation
ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 2,539 ÷ 8,055 = 31.52%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Nike Inc.’s ROE improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020 not reaching 2018 level. |
Return on Assets (ROA)
Nike Inc., ROA calculation, comparison to benchmarks
| May 31, 2020 | May 31, 2019 | May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 2,539 | 4,029 | 1,933 | 4,240 | 3,760 | 3,273 | |
| Total assets | 31,342 | 23,717 | 22,536 | 23,259 | 21,396 | 21,600 | |
| Profitability Ratio | |||||||
| ROA1 | 8.10% | 16.99% | 8.58% | 18.23% | 17.57% | 15.15% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Colgate-Palmolive Co. | 16.93% | 15.74% | 19.74% | 15.97% | 20.14% | — | |
| Estée Lauder Cos. Inc. | 3.85% | 13.57% | 8.82% | 10.80% | 12.08% | 13.22% | |
| Kimberly-Clark Corp. | 13.42% | 14.11% | 9.71% | 15.04% | 14.83% | — | |
| ROA, Sector | |||||||
| Personal Goods | 10.02% | 15.39% | 11.09% | 15.63% | 16.53% | — | |
| ROA, Industry | |||||||
| Consumer Goods | 7.21% | 6.06% | 8.09% | 5.90% | 8.70% | — | |
Based on: 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21), 10-K (filing date: 2015-07-23).
1 2020 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 2,539 ÷ 31,342 = 8.10%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Nike Inc.’s ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020. |