Nike Inc. (NYSE:NKE) 

Inventory Turnover

The inventory turnover ratio generally improved from 2.87 in 2020 to a peak of 3.79 in 2024, indicating more efficient inventory management over time. However, there was a slight decline to 3.54 in 2025, suggesting a minor reduction in inventory turnover efficiency in the most recent year.

Receivables Turnover

The receivables turnover ratio showed a significant decline from 13.61 in 2020 to 9.98 in 2021, remaining relatively stable around 10 through 2022. It then improved to 12.4 in 2023 before declining again to 9.82 in 2025. This reflects some volatility in the speed of collections from customers over the period, with no clear long-term upward trend.

Payables Turnover

The payables turnover ratio decreased from 9.41 in 2020 to a low of 7.51 in 2022, implying that the company was taking longer to pay its suppliers. This was followed by an increase to 10.11 in 2023, indicating faster payments, but then a drop back to 7.62 by 2025. This suggests an inconsistent approach in managing payables, alternating between more rapid and delayed payments.

Working Capital Turnover

This ratio declined from 3.05 in 2020 to a low of 2.67 in 2022, followed by a steady increase to 3.62 in 2025. The recent upward trend indicates improving efficiency in using working capital to generate sales.

Average Inventory Processing Period

Days inventory on hand decreased from 127 days in 2020 to 96 days in 2024, reflecting faster inventory processing and turnover. There was a slight increase to 103 days in 2025, but overall, the trend demonstrates improved inventory management with shorter holding periods.

Average Receivable Collection Period

The average collection period increased from 27 days in 2020 to 37 days in 2021, fluctuated in the subsequent years, and reached back to 37 days in 2025. This indicates some inconsistency but generally a lengthening of the time taken to collect receivables compared to earlier years.

Operating Cycle

The operating cycle, representing the total days required from inventory purchase to cash collection, fluctuated notably: it decreased from 154 days in 2020 to 127 days in 2024, then increased again to 140 days in 2025. This suggests variability in operational efficiency, with some improvement but no sustained reduction in overall cycle length.

Average Payables Payment Period

The payment period to suppliers expanded from 39 days in 2020 to a peak of 49 days in 2022, fell to 36 days in 2023, and rose again to 48 days in 2025. The company appears to strategically vary payment terms, sometimes extending payments and other times shortening them.

Cash Conversion Cycle

The cash conversion cycle improved significantly from 115 days in 2020 to 90 days in 2024, indicating more efficient cash flow management. It slightly increased to 92 days in 2025, but overall, the trend reflects a notable reduction in the number of days cash is tied up in operations.

Cost of Sales

The cost of sales exhibited an overall increasing trend from 2020 to 2023, rising from 21,162 million US dollars in 2020 to a peak of 28,925 million in 2023. However, there was a decline in the subsequent years, with costs decreasing to 28,475 million in 2024 and further to 26,519 million in 2025. This indicates a shift from consistent growth toward a reduction in cost of sales in the most recent periods.

Inventories

Inventories showed some fluctuations over the years. After a decrease from 7,367 million in 2020 to 6,854 million in 2021, inventories increased significantly to 8,420 million in 2022 and remained relatively stable through 2023 at 8,454 million. In 2024 and 2025, inventory levels slightly decreased to 7,519 million and 7,489 million respectively. The pattern suggests a period of inventory buildup followed by normalization in stock levels.

Inventory Turnover Ratio

The inventory turnover ratio experienced variability throughout the period. Starting at 2.87 in 2020, it rose sharply to 3.59 in 2021, then declined to 3.0 in 2022. The ratio improved again to 3.42 in 2023, reaching a peak of 3.79 in 2024 before slightly declining to 3.54 in 2025. This trend indicates generally improving efficiency in inventory management, despite some fluctuations year over year.

Revenue Trend

Revenues show a general upward trajectory from 2020 to 2024, increasing from $37,403 million in 2020 to a peak of $51,362 million in 2024. However, in 2025 there is a noticeable decline to $46,309 million, marking a reversal of the growth trend observed in previous years.

Accounts Receivable, Net

The net accounts receivable balance increased significantly from $2,749 million in 2020 to $4,463 million in 2021, showing a substantial rise in outstanding customer balances. This level remains elevated through the following years, fluctuating moderately but generally maintaining an upward trend to $4,717 million in 2025.

Receivables Turnover Ratio

The receivables turnover ratio decreased sharply from 13.61 in 2020 to 9.98 in 2021, indicating slower collection of accounts receivable relative to prior revenue levels. The ratio stabilizes somewhat between 9.82 and 12.4 in the subsequent years, with a slight increase in 2023 to 12.4 before declining again to 9.82 in 2025. This suggests some variability in collection efficiency but an overall trend toward slower turnover compared to the initial period.

Overall Analysis

The data collectively indicate a phase of revenue growth accompanied by a rising balance of accounts receivable and a declining ability to collect receivables efficiently, as evidenced by the decreasing receivables turnover ratio. The drop in revenues in 2025, combined with sustained high accounts receivable and lower turnover, could suggest emerging challenges in sales or credit management during this period. Continuous monitoring of receivables management and revenue drivers will be important to understand the underlying causes and to rectify potential operational inefficiencies.

Cost of Sales

The cost of sales exhibited an overall upward trajectory from 2020 to 2023, increasing from 21,162 million USD in 2020 to 28,925 million USD in 2023. However, there is a slight decline observed in 2024 and further in 2025, with values decreasing to 28,475 million USD and 26,519 million USD respectively. This suggests an initial rise in production or procurement costs followed by a reduction in the latter years.

Accounts Payable

The accounts payable balance demonstrates more variability over the period. Starting at 2,248 million USD in 2020, it rose steadily to 3,358 million USD in 2022, dipped to 2,851 million USD in 2024, and then increased markedly to 3,479 million USD in 2025. This pattern indicates fluctuations in short-term obligations to suppliers, potentially reflecting changes in credit terms or purchasing activities.

Payables Turnover Ratio

The payables turnover ratio shows significant variability across the years. It declined from 9.41 in 2020 to a low of 7.51 in 2022, indicating a slower rate of paying off suppliers. This was followed by a sharp increase to 10.11 in 2023 and a slight decrease to 9.99 in 2024 before dropping again to 7.62 in 2025. These fluctuations may suggest changing payment policies or cash flow management strategies affecting how quickly liabilities are settled.

The financial data over the periods from May 31, 2020, to May 31, 2025, reveals several key trends in working capital, revenues, and working capital turnover.

Working Capital

Working capital showed a general decline in the latter years after initially increasing. It rose from 12,272 million US dollars in 2020 to a peak of 17,483 million US dollars in 2022. Subsequently, it decreased steadily to 12,796 million US dollars by 2025. This suggests a tightening of short-term liquidity or more efficient asset management after 2022.

Revenues

Revenues displayed an upward trend from 2020 through 2024, increasing from 37,403 million to a high of 51,362 million US dollars. However, in 2025, revenues declined to 46,309 million US dollars. This indicates growth over the medium term but a contraction in the latest period analyzed.

Working Capital Turnover

The working capital turnover ratio exhibited some fluctuations but showed improvement in the later years. Starting at 3.05 in 2020, it dipped to around 2.67-2.68 in 2021 and 2022, then increased progressively from 3.21 in 2023 to 3.62 in 2025. The rising turnover ratio in the last three years reflects enhanced efficiency in using working capital to generate revenues.

Overall, the data indicates that while working capital amounts decreased after 2022, the company improved its efficiency in deploying working capital as evidenced by higher turnover ratios. Revenue growth was strong for several years but faced a setback in the most recent year. These trends suggest a focus on operational efficiencies and possibly inventory or receivables management changes amid a challenging revenue environment in 2025.

Inventory Turnover

The inventory turnover ratio exhibits a fluctuating but generally increasing trend over the analyzed period. Starting at 2.87 in May 2020, it increases significantly to 3.59 in May 2021, indicating more efficient inventory management or stronger sales relative to inventory. Subsequently, this ratio dips to 3.00 in May 2022 but recovers to higher levels in the following years, reaching a peak of 3.79 in May 2024 before slightly declining to 3.54 in May 2025. Despite the fluctuations, the overall trend suggests improved utilization of inventory compared to the initial period.

Average Inventory Processing Period

The average inventory processing period, measured in days, shows an inversely related pattern compared to the inventory turnover ratio. Beginning at 127 days in May 2020, it reduces sharply to 102 days in May 2021, aligning with the increased turnover in that year. Although it increases somewhat to 122 days in May 2022, it then declines again over the next years, reaching a low of 96 days in May 2024 before slightly increasing to 103 days in May 2025. This indicates a general improvement in the speed of inventory turnover, with the company processing its inventory in fewer days on average compared to the earlier periods.

Summary of Trends

The data reveals an overall enhancement in inventory efficiency from May 2020 through May 2025. The inverse relationship between inventory turnover and average processing period highlights improved inventory management practices, contributing to quicker inventory cycles and potentially better cash flow management. However, some year-to-year variability suggests that operational or market factors might have influenced short-term fluctuations in inventory performance.

Receivables Turnover

The receivables turnover ratio has exhibited fluctuations over the analyzed periods. It started at a relatively high level of 13.61 in May 2020, then declined sharply to 9.98 in May 2021 and remained steady around 10.01 in May 2022. Following this trough, there was a recovery to 12.4 by May 2023, indicating improved efficiency in collecting receivables. However, this improvement was not sustained as the ratio again decreased to 11.6 in May 2024 and further dropped to 9.82 in May 2025. Overall, the trend reflects variability in collection efficiency with a general downward tendency in the latest year.

Average Receivable Collection Period

The average number of days to collect receivables has moved inversely to the receivables turnover, as expected. It began at 27 days in May 2020, then increased markedly to 37 days in May 2021 where it stayed almost constant at 36 days in May 2022. This period saw a reduction to 29 days by May 2023, signaling more efficient collection. However, the collection period increased again to 31 days in May 2024 and further lengthened to 37 days by May 2025. The data indicates that the company experienced slower collections in the most recent years compared to the earlier periods.

The analysis of the financial data reveals several noteworthy trends related to inventory management, receivable collection, and the overall operating cycle over the six-year period.

Average Inventory Processing Period

This metric shows fluctuations throughout the period. It began at 127 days in 2020, decreased significantly to 102 days in 2021, then increased again to 122 days in 2022. Subsequent years saw a decline to 107 days in 2023 and further to 96 days in 2024, followed by a slight rise to 103 days in 2025. Overall, the trend suggests improved inventory turnover efficiency after 2020, despite some variability.

Average Receivable Collection Period

The collection period increased from 27 days in 2020 to 37 days in 2021, remaining close to this elevated level with minor fluctuations. It slightly decreased to 36 days in 2022, then dropped more substantially to 29 days in 2023. However, in the last two years, it rose again to 31 days in 2024 and 37 days in 2025. This indicates some volatility in receivable collection efficiency, with an overall tendency toward longer collection periods compared to the starting year.

Operating Cycle

The operating cycle combines the trends of inventory processing and receivable collection periods. It started at 154 days in 2020, decreased to 139 days in 2021, then increased markedly to 158 days in 2022, corresponding with the rise in inventory processing period. Afterwards, it dropped to 136 days in 2023 and further to 127 days in 2024, before climbing again to 140 days in 2025. This pattern reflects a general improvement in the operating cycle compared to the initial period but also highlights notable year-to-year variations.

In summary, the data indicates efforts toward improving inventory turnover and operating cycle efficiency, even though the receivable collection period shows inconsistency and a tendency to lengthen in later years. These mixed trends suggest the company may need to address receivables management to optimize its full operating cycle further.

Payables Turnover

The payables turnover ratio experienced fluctuations over the analyzed periods. Starting at 9.41 in 2020, it declined to 8.67 in 2021 and further to 7.51 in 2022, indicating a slower rate of paying off suppliers. However, a significant increase occurred in 2023, reaching 10.11, followed by a slight decrease to 9.99 in 2024. In 2025, the ratio fell again to 7.62, suggesting variability in the company's efficiency in managing payables.

Average Payables Payment Period

The average payables payment period showed an inverse pattern compared to the payables turnover ratio. It increased from 39 days in 2020 to a peak of 49 days in 2022, indicating that the company took longer to settle its payables. This period shortened substantially to 36 days in 2023 and remained close at 37 days in 2024, suggesting improved payment speed. However, in 2025, it increased again to 48 days, reflecting longer payments to suppliers once more.

Overall Analysis

The data reveals a cyclical pattern in the management of payables. The fluctuations between 2020 and 2025 suggest periods of both quicker and slower payment practices. These variations can have implications for the company’s liquidity and supplier relationships, reflecting adjustments in cash management strategies or possibly responses to external financial conditions during these years.

Average Inventory Processing Period

The average inventory processing period shows notable fluctuations over the reported years. It started at 127 days in 2020, then decreased to 102 days in 2021, indicating an improvement in inventory turnover. However, it increased again to 122 days in 2022 before falling to 96 days in 2024, the lowest value in the period, and slightly rising to 103 days in 2025. Overall, there is a pattern of variability with a general downward trend toward more efficient inventory management in recent years.

Average Receivable Collection Period

The receivable collection period exhibits some volatility throughout the years. Beginning at 27 days in 2020, it increased sharply to 37 days in 2021 and remained around that level with minor fluctuations (36 days in 2022, 29 days in 2023, 31 days in 2024, and returning to 37 days in 2025). This indicates periodic challenges in receivables collection, with occasional delays in converting credit sales into cash.

Average Payables Payment Period

The payables payment period displays an irregular trend. It rose steadily from 39 days in 2020 to a peak of 49 days in 2022, implying extended payment terms or slower payment to suppliers during that time. This was followed by a significant decrease to 36 days in 2023 and a slight rise to 37 days in 2024, before increasing sharply again to 48 days in 2025. The company appears to alternate between quicker and slower payment cycles.

Cash Conversion Cycle

The cash conversion cycle (CCC) reflects the combined effects of the above components on working capital efficiency. It decreased from 115 days in 2020 to 97 days in 2021 and then rose to 109 days in 2022. Subsequent years show improvement with a decline to 90 days in 2024, the shortest cycle within the timeframe, followed by a slight increase to 92 days in 2025. This trend suggests overall improved liquidity management and cash flow efficiency, despite some year-to-year fluctuations.