Enterprise Value to FCFF (EV/FCFF)
Paying user area
Try for free
Nike Inc. pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Nike Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Free Cash Flow to The Firm (FCFF)
Nike Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 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).
- Cash Provided by Operations
- Cash provided by operations showed a significant decline from 5,903 million US dollars in May 2019 to 2,485 million in May 2020. Subsequently, it rebounded sharply to 6,657 million in May 2021. After a decline to 5,188 million in May 2022, it showed moderate recovery in the following years, reaching 5,841 million in May 2023 and further increasing to 7,429 million in May 2024. This pattern indicates a period of volatility followed by a strong upward trend in operational cash generation.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm exhibited a similar trend to cash from operations. There was a notable decrease from 4,912 million US dollars in May 2019 to 1,511 million in May 2020. This metric then rose sharply to 6,203 million in May 2021. However, it declined again to 4,694 million in May 2022 before recovering gradually to 5,156 million in May 2023 and then increasing substantially to 6,941 million in May 2024. This suggests fluctuations in the firm's ability to generate cash after capital expenditures, with a strong improvement in the most recent reported year.
- Overall Analysis
- Both operational cash flow and free cash flow experienced a trough in the fiscal year ending May 2020, possibly reflecting external challenges impacting cash generation. Following this downturn, there was a significant rebound in May 2021, indicating recovery. Although subsequent fluctuations were evident, the general trajectory from May 2022 through May 2024 is upward, highlighting improving cash-generating efficiency and stronger liquidity position. The increased free cash flow relative to operations in recent years points toward managing capital investments effectively while maintaining robust operating cash flows.
Interest Paid, Net of Tax
Nike Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 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).
2 2024 Calculation
Cash paid during the year for interest, net of capitalized interest, tax = Cash paid during the year for interest, net of capitalized interest × EITR
= × =
- Effective Income Tax Rate (EITR) Trends
-
The effective income tax rate demonstrates notable fluctuations over the six-year period. It initially increases from 16.1% in May 2019 to a peak of 20.2% in May 2020. Following this, the rate declines to 17.7% in May 2021 and sharply drops to its lowest point of 9.1% in May 2022. After this trough, there is a partial rebound in the effective tax rate, rising to 18.2% in May 2023 before decreasing again to 14.9% in May 2024. This volatility may reflect changes in tax legislation, variations in the geographic distribution of taxable income, or alterations in tax planning strategies over the period.
- Cash Paid for Interest Trends
-
Cash paid for interest, net of capitalized interest and tax, exhibits a consistent upward trend throughout the entire timeframe. Starting at $128 million in May 2019, the amount increases moderately to $112 million in May 2020 before more than doubling to $241 million in May 2021. The upward trajectory continues with further increases to $264 million in May 2022, $284 million in May 2023, and reaching $324 million by May 2024. This steady increase may suggest rising debt levels, increased interest rates, or changes in the company's financing structure that have resulted in higher interest expenses over the years.
- Summary Insights
-
The effective income tax rate shows significant variability, indicating potential external or internal factors influencing tax liabilities, whereas the cash paid for interest reflects steady growth, potentially highlighting increasing leverage or interest cost pressures. Monitoring these trends is essential for understanding the company’s tax efficiency and financing costs dynamics over the analyzed period.
Enterprise Value to FCFF Ratio, Current
Nike Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| lululemon athletica inc. | |
| EV/FCFF, Sector | |
| Consumer Durables & Apparel | |
| EV/FCFF, Industry | |
| Consumer Discretionary | |
Based on: 10-K (reporting date: 2024-05-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Nike Inc., historical EV/FCFF calculation, comparison to benchmarks
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | |||||||
| Free cash flow to the firm (FCFF)2 | |||||||
| Valuation Ratio | |||||||
| EV/FCFF3 | |||||||
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| lululemon athletica inc. | |||||||
| EV/FCFF, Sector | |||||||
| Consumer Durables & Apparel | |||||||
| EV/FCFF, Industry | |||||||
| Consumer Discretionary | |||||||
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 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).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value showed significant fluctuations over the analyzed periods. It peaked at 248,616 million US dollars in May 2021, followed by a sharp decline to 171,515 million in May 2022. This declining trend continued through May 2024, reaching its lowest point at 104,396 million US dollars, which indicates a substantial reduction in market valuation or changes in capital structure.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm experienced variability but displayed an overall positive trend. Starting from 4,912 million US dollars in May 2019, it declined notably in May 2020 to 1,511 million. However, FCFF recovered strongly to 6,203 million in May 2021, then slightly decreased in the following year before rising steadily again, reaching its highest value of 6,941 million US dollars in May 2024. This suggests improving operational cash generation capabilities.
- EV/FCFF Ratio
- The EV to FCFF ratio demonstrates considerable volatility, indicating changing market perceptions of value relative to cash flow. The ratio spiked dramatically to 102.21 in May 2020, signaling an elevated valuation compared to free cash flow during that period. Subsequently, the ratio trended downward, reflecting either increased FCFF or a decreased enterprise value, ending at a relatively low level of 15.04 by May 2024. This decline suggests a more attractive valuation relative to free cash flow in the most recent period.