Stock Analysis on Net

Nike Inc. (NYSE:NKE)

Analysis of Short-term (Operating) Activity Ratios 

Microsoft Excel

Short-term Activity Ratios (Summary)

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

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Turnover Ratios
Inventory turnover 3.00 3.59 2.87 3.85 3.89 3.77
Receivables turnover 10.01 9.98 13.61 9.16 10.41 9.34
Payables turnover 7.51 8.67 9.41 8.29 8.97 9.30
Working capital turnover 2.67 2.68 3.05 4.52 4.00 3.24
Average No. Days
Average inventory processing period 122 102 127 95 94 97
Add: Average receivable collection period 36 37 27 40 35 39
Operating cycle 158 139 154 135 129 136
Less: Average payables payment period 49 42 39 44 41 39
Cash conversion cycle 109 97 115 91 88 97

Based on: 10-K (reporting date: 2022-05-31), 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).

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 improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.
Receivables turnover An activity ratio equal to revenue divided by receivables. Nike Inc. receivables turnover ratio deteriorated from 2020 to 2021 but then slightly improved from 2021 to 2022.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Nike Inc. payables turnover ratio decreased from 2020 to 2021 and from 2021 to 2022.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Nike Inc. working capital turnover ratio deteriorated from 2020 to 2021 and from 2021 to 2022.

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 improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 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 deteriorated from 2020 to 2021 but then slightly improved from 2021 to 2022.
Operating cycle Equal to average inventory processing period plus average receivables collection period. Nike Inc. operating cycle improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.
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 increased from 2020 to 2021 and from 2021 to 2022.
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 improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

Inventory Turnover

Nike Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Cost of sales 25,231 24,576 21,162 21,643 20,441 19,038
Inventories 8,420 6,854 7,367 5,622 5,261 5,055
Short-term Activity Ratio
Inventory turnover1 3.00 3.59 2.87 3.85 3.89 3.77
Benchmarks
Inventory Turnover, Industry
Consumer Discretionary 7.00 7.44 7.66 7.97 7.61

Based on: 10-K (reporting date: 2022-05-31), 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).

1 2022 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= 25,231 ÷ 8,420 = 3.00

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 improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

Receivables Turnover

Nike Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Revenues 46,710 44,538 37,403 39,117 36,397 34,350
Accounts receivable, net 4,667 4,463 2,749 4,272 3,498 3,677
Short-term Activity Ratio
Receivables turnover1 10.01 9.98 13.61 9.16 10.41 9.34
Benchmarks
Receivables Turnover, Industry
Consumer Discretionary 19.67 20.05 19.88 20.51 20.23

Based on: 10-K (reporting date: 2022-05-31), 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).

1 2022 Calculation
Receivables turnover = Revenues ÷ Accounts receivable, net
= 46,710 ÷ 4,667 = 10.01

Short-term activity ratio Description The company
Receivables turnover An activity ratio equal to revenue divided by receivables. Nike Inc. receivables turnover ratio deteriorated from 2020 to 2021 but then slightly improved from 2021 to 2022.

Payables Turnover

Nike Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Cost of sales 25,231 24,576 21,162 21,643 20,441 19,038
Accounts payable 3,358 2,836 2,248 2,612 2,279 2,048
Short-term Activity Ratio
Payables turnover1 7.51 8.67 9.41 8.29 8.97 9.30
Benchmarks
Payables Turnover, Industry
Consumer Discretionary 4.65 4.67 5.43 5.66 5.34

Based on: 10-K (reporting date: 2022-05-31), 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).

1 2022 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= 25,231 ÷ 3,358 = 7.51

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 decreased from 2020 to 2021 and from 2021 to 2022.

Working Capital Turnover

Nike Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data (US$ in millions)
Current assets 28,213 26,291 20,556 16,525 15,134 16,061
Less: Current liabilities 10,730 9,674 8,284 7,866 6,040 5,474
Working capital 17,483 16,617 12,272 8,659 9,094 10,587
 
Revenues 46,710 44,538 37,403 39,117 36,397 34,350
Short-term Activity Ratio
Working capital turnover1 2.67 2.68 3.05 4.52 4.00 3.24
Benchmarks
Working Capital Turnover, Industry
Consumer Discretionary 13.01 15.65 45.70 25.34 26.87

Based on: 10-K (reporting date: 2022-05-31), 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).

1 2022 Calculation
Working capital turnover = Revenues ÷ Working capital
= 46,710 ÷ 17,483 = 2.67

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 2020 to 2021 and from 2021 to 2022.

Average Inventory Processing Period

Nike Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data
Inventory turnover 3.00 3.59 2.87 3.85 3.89 3.77
Short-term Activity Ratio (no. days)
Average inventory processing period1 122 102 127 95 94 97
Benchmarks (no. days)
Average Inventory Processing Period, Industry
Consumer Discretionary 52 49 48 46 48

Based on: 10-K (reporting date: 2022-05-31), 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).

1 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.00 = 122

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 improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

Average Receivable Collection Period

Nike Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data
Receivables turnover 10.01 9.98 13.61 9.16 10.41 9.34
Short-term Activity Ratio (no. days)
Average receivable collection period1 36 37 27 40 35 39
Benchmarks (no. days)
Average Receivable Collection Period, Industry
Consumer Discretionary 19 18 18 18 18

Based on: 10-K (reporting date: 2022-05-31), 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).

1 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 10.01 = 36

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 deteriorated from 2020 to 2021 but then slightly improved from 2021 to 2022.

Operating Cycle

Nike Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data
Average inventory processing period 122 102 127 95 94 97
Average receivable collection period 36 37 27 40 35 39
Short-term Activity Ratio
Operating cycle1 158 139 154 135 129 136
Benchmarks
Operating Cycle, Industry
Consumer Discretionary 71 67 66 64 66

Based on: 10-K (reporting date: 2022-05-31), 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).

1 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 122 + 36 = 158

Short-term activity ratio Description The company
Operating cycle Equal to average inventory processing period plus average receivables collection period. Nike Inc. operating cycle improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

Average Payables Payment Period

Nike Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data
Payables turnover 7.51 8.67 9.41 8.29 8.97 9.30
Short-term Activity Ratio (no. days)
Average payables payment period1 49 42 39 44 41 39
Benchmarks (no. days)
Average Payables Payment Period, Industry
Consumer Discretionary 78 78 67 64 68

Based on: 10-K (reporting date: 2022-05-31), 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).

1 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 7.51 = 49

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 increased from 2020 to 2021 and from 2021 to 2022.

Cash Conversion Cycle

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

No. days

Microsoft Excel
May 31, 2022 May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017
Selected Financial Data
Average inventory processing period 122 102 127 95 94 97
Average receivable collection period 36 37 27 40 35 39
Average payables payment period 49 42 39 44 41 39
Short-term Activity Ratio
Cash conversion cycle1 109 97 115 91 88 97
Benchmarks
Cash Conversion Cycle, Industry
Consumer Discretionary -7 -11 -1 0 -2

Based on: 10-K (reporting date: 2022-05-31), 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).

1 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 122 + 3649 = 109

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 improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.