Stock Analysis on Net

Nike Inc. (NYSE:NKE)

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel LibreOffice Calc

Short-term Activity Ratios (Summary)

Nike Inc., short-term (operating) activity ratios

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Turnover Ratios
Inventory turnover 3.59 2.87 3.85 3.89 3.77 3.60
Receivables turnover 9.98 13.61 9.16 10.41 9.34 9.99
Payables turnover 8.67 9.41 8.29 8.97 9.30 7.94
Working capital turnover 2.68 3.05 4.52 4.00 3.24 3.35
Average No. Days
Average inventory processing period 102 127 95 94 97 101
Add: Average receivable collection period 37 27 40 35 39 37
Operating cycle 139 154 135 129 136 138
Less: Average payables payment period 42 39 44 41 39 46
Cash conversion cycle 97 115 91 88 97 92

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).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Nike Inc. inventory turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.
Receivables turnover An activity ratio equal to revenue divided by receivables. Nike Inc. receivables turnover ratio improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Nike Inc. payables turnover ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Nike Inc. working capital turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021.

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Nike Inc. number of days of inventory outstanding deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Nike Inc. number of days of receivables outstanding improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Nike Inc. operating cycle deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Nike Inc. number of days of payables outstanding decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Nike Inc. cash conversion cycle deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Inventory Turnover

Nike Inc., inventory turnover 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)
Cost of sales 24,576  21,162  21,643  20,441  19,038  17,405 
Inventories 6,854  7,367  5,622  5,261  5,055  4,838 
Short-term Activity Ratio
Inventory turnover1 3.59 2.87 3.85 3.89 3.77 3.60
Benchmarks
Inventory Turnover, Industry
Consumer Discretionary 7.25 7.32 7.62 7.31 7.52

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
Inventory turnover = Cost of sales ÷ Inventories
= 24,576 ÷ 6,854 = 3.59

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Nike Inc. inventory turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Receivables Turnover

Nike Inc., receivables turnover 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)
Revenues 44,538  37,403  39,117  36,397  34,350  32,376 
Accounts receivable, net 4,463  2,749  4,272  3,498  3,677  3,241 
Short-term Activity Ratio
Receivables turnover1 9.98 13.61 9.16 10.41 9.34 9.99
Benchmarks
Receivables Turnover, Industry
Consumer Discretionary 20.73 20.31 20.92 20.66 21.12

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
Receivables turnover = Revenues ÷ Accounts receivable, net
= 44,538 ÷ 4,463 = 9.98

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Nike Inc. receivables turnover ratio improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.

Payables Turnover

Nike Inc., payables turnover 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)
Cost of sales 24,576  21,162  21,643  20,441  19,038  17,405 
Accounts payable 2,836  2,248  2,612  2,279  2,048  2,191 
Short-term Activity Ratio
Payables turnover1 8.67 9.41 8.29 8.97 9.30 7.94
Benchmarks
Payables Turnover, Industry
Consumer Discretionary 4.70 5.35 5.58 5.28 5.65

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
Payables turnover = Cost of sales ÷ Accounts payable
= 24,576 ÷ 2,836 = 8.67

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Nike Inc. payables turnover ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.

Working Capital Turnover

Nike Inc., working capital turnover 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)
Current assets 26,291  20,556  16,525  15,134  16,061  15,025 
Less: Current liabilities 9,674  8,284  7,866  6,040  5,474  5,358 
Working capital 16,617  12,272  8,659  9,094  10,587  9,667 
 
Revenues 44,538  37,403  39,117  36,397  34,350  32,376 
Short-term Activity Ratio
Working capital turnover1 2.68 3.05 4.52 4.00 3.24 3.35
Benchmarks
Working Capital Turnover, Industry
Consumer Discretionary 16.26 31.30 19.91 20.39 22.87

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
Working capital turnover = Revenues ÷ Working capital
= 44,538 ÷ 16,617 = 2.68

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Nike Inc. working capital turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021.

Average Inventory Processing Period

Nike Inc., average inventory processing period 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
Inventory turnover 3.59 2.87 3.85 3.89 3.77 3.60
Short-term Activity Ratio (no. days)
Average inventory processing period1 102 127 95 94 97 101
Benchmarks (no. days)
Average Inventory Processing Period, Industry
Consumer Discretionary 50 50 48 50 49

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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.59 = 102

Short-term activity ratio Description The company
Average inventory processing period An activity ratio equal to the number of days in the period divided by inventory turnover over the period. Nike Inc. number of days of inventory outstanding deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Average Receivable Collection Period

Nike Inc., average receivable collection period 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
Receivables turnover 9.98 13.61 9.16 10.41 9.34 9.99
Short-term Activity Ratio (no. days)
Average receivable collection period1 37 27 40 35 39 37
Benchmarks (no. days)
Average Receivable Collection Period, Industry
Consumer Discretionary 18 18 17 18 17

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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 9.98 = 37

Short-term activity ratio Description The company
Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover. Nike Inc. number of days of receivables outstanding improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021 not reaching 2019 level.

Operating Cycle

Nike Inc., operating cycle calculation, comparison to benchmarks

No. days

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
Average inventory processing period 102 127 95 94 97 101
Average receivable collection period 37 27 40 35 39 37
Short-term Activity Ratio
Operating cycle1 139 154 135 129 136 138
Benchmarks
Operating Cycle, Industry
Consumer Discretionary 68 68 65 68 66

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 cycle = Average inventory processing period + Average receivable collection period
= 102 + 37 = 139

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Nike Inc. operating cycle deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Average Payables Payment Period

Nike Inc., average payables payment period 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
Payables turnover 8.67 9.41 8.29 8.97 9.30 7.94
Short-term Activity Ratio (no. days)
Average payables payment period1 42 39 44 41 39 46
Benchmarks (no. days)
Average Payables Payment Period, Industry
Consumer Discretionary 78 68 65 69 65

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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.67 = 42

Short-term activity ratio Description The company
Average payables payment period An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. Nike Inc. number of days of payables outstanding decreased from 2019 to 2020 but then increased from 2020 to 2021 not reaching 2019 level.

Cash Conversion Cycle

Nike Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

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
Average inventory processing period 102 127 95 94 97 101
Average receivable collection period 37 27 40 35 39 37
Average payables payment period 42 39 44 41 39 46
Short-term Activity Ratio
Cash conversion cycle1 97 115 91 88 97 92
Benchmarks
Cash Conversion Cycle, Industry
Consumer Discretionary -10 0 0 -1 1

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
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 102 + 3742 = 97

Short-term activity ratio Description The company
Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. Nike Inc. cash conversion cycle deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.