Stock Analysis on Net

Nike Inc. (NYSE:NKE)

Analysis of Profitability Ratios 

Microsoft Excel LibreOffice Calc

Profitability ratios measure the company ability to generate profitable sales from its resources (assets).


Profitability Ratios (Summary)

Nike Inc., profitability ratios

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May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Return on Sales
Gross profit margin 44.82% 43.42% 44.67% 43.84% 44.58% 46.24%
Operating profit margin 15.58% 8.33% 12.20% 12.21% 13.83% 13.91%
Net profit margin 12.86% 6.79% 10.30% 5.31% 12.34% 11.61%
Return on Investment
Return on equity (ROE) 44.86% 31.52% 44.57% 19.70% 34.17% 30.67%
Return on assets (ROA) 15.17% 8.10% 16.99% 8.58% 18.23% 17.57%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

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. gross profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Nike Inc. operating profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Nike Inc. net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Nike Inc. ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
ROA A profitability ratio calculated as net income divided by total assets. Nike Inc. ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Gross Profit Margin

Nike Inc., gross profit margin calculation

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Gross profit 19,962  16,241  17,474  15,956  15,312  14,971 
Revenues 44,538  37,403  39,117  36,397  34,350  32,376 
Profitability Ratio
Gross profit margin1 44.82% 43.42% 44.67% 43.84% 44.58% 46.24%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

1 2021 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 19,962 ÷ 44,538 = 44.82%

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. gross profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Operating Profit Margin

Nike Inc., operating profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Operating income 6,937  3,115  4,772  4,445  4,749  4,502 
Revenues 44,538  37,403  39,117  36,397  34,350  32,376 
Profitability Ratio
Operating profit margin1 15.58% 8.33% 12.20% 12.21% 13.83% 13.91%
Benchmarks
Operating Profit Margin, Industry
Consumer Discretionary 8.52% 6.39% 7.29% 7.79% 8.26%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

1 2021 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × 6,937 ÷ 44,538 = 15.58%

Profitability ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Nike Inc. operating profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Net Profit Margin

Nike Inc., net profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Net income 5,727  2,539  4,029  1,933  4,240  3,760 
Revenues 44,538  37,403  39,117  36,397  34,350  32,376 
Profitability Ratio
Net profit margin1 12.86% 6.79% 10.30% 5.31% 12.34% 11.61%
Benchmarks
Net Profit Margin, Industry
Consumer Discretionary 8.81% 5.23% 5.61% 5.94% 4.31%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

1 2021 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 5,727 ÷ 44,538 = 12.86%

Profitability ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Nike Inc. net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Return on Equity (ROE)

Nike Inc., ROE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Net income 5,727  2,539  4,029  1,933  4,240  3,760 
Shareholders’ equity 12,767  8,055  9,040  9,812  12,407  12,258 
Profitability Ratio
ROE1 44.86% 31.52% 44.57% 19.70% 34.17% 30.67%
Benchmarks
ROE, Industry
Consumer Discretionary 34.62% 26.12% 33.02% 33.01% 22.58%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

1 2021 Calculation
ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 5,727 ÷ 12,767 = 44.86%

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Nike Inc. ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Return on Assets (ROA)

Nike Inc., ROA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Net income 5,727  2,539  4,029  1,933  4,240  3,760 
Total assets 37,740  31,342  23,717  22,536  23,259  21,396 
Profitability Ratio
ROA1 15.17% 8.10% 16.99% 8.58% 18.23% 17.57%
Benchmarks
ROA, Industry
Consumer Discretionary 8.01% 4.58% 5.44% 5.91% 4.13%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

1 2021 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 5,727 ÷ 37,740 = 15.17%

Profitability ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Nike Inc. ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.