Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Nike Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 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).
An analysis of the cash flow trajectory from 2021 through 2026 reveals a period of moderate volatility and recovery peaking in 2024, followed by a significant and sustained contraction in the final two years of the period.
- Operational Cash Flow Dynamics
- Cash provided by operations experienced a decline from 6,657 million in 2021 to 5,188 million in 2022, followed by a two-year recovery phase. This recovery peaked in 2024 at 7,429 million. However, a sharp downturn is observed starting in 2025, where cash provided by operations fell to 3,698 million, continuing downward to 2,868 million by May 31, 2026.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF mirrored the movement of operational cash flow, exhibiting a dip in 2022 to 4,694 million before climbing to a peak of 6,941 million in 2024. The subsequent decline is severe, with FCFF dropping by approximately 48% in 2025 to 3,590 million and further decreasing to 2,441 million in 2026. This represents a total reduction of approximately 65% from the 2024 peak.
- Correlation and Capital Allocation
- A high degree of correlation exists between cash provided by operations and FCFF across the entire six-year span. The consistent and narrow gap between these two metrics suggests that capital expenditures have remained relatively stable and proportional to operating cash flows, indicating that the decline in FCFF is driven primarily by a reduction in operating cash generation rather than an increase in capital investment.
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Interest Paid, Net of Tax
Nike Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 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).
2 2026 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
= 323 × 20.30% = 66
Analysis of cash outflows for interest, net of tax, reveals a period of sustained growth followed by a notable contraction. Between 2021 and 2024, net interest payments increased steadily, peaking at 324 million USD, before experiencing a decline through 2026.
- Net Interest Payment Trajectory
- Cash paid for interest, net of tax, rose from 241 million USD in 2021 to 324 million USD in 2024, reflecting a consistent upward trend over a four-year period. This growth plateaued in 2025 at 322 million USD before decreasing significantly to 257 million USD in 2026.
- Effective Income Tax Rate (EITR) Volatility
- The EITR demonstrated significant fluctuation, dropping to a period low of 9.1% in 2022. Following this dip, the rate trended generally upward, reaching its highest point of 20.3% in 2026.
- Interrelationship Between Tax Rates and Net Outflows
- The reduction in net interest paid in 2026 coincides with the peak effective income tax rate of 20.3%. Because the interest figure is reported net of tax, the increase in the tax rate enhances the tax shield effect, which contributes to the reduction of the net cash outflow for interest payments.
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Enterprise Value to FCFF Ratio, Current
Nike Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 61,890) |
| Free cash flow to the firm (FCFF) | 2,441) |
| Valuation Ratio | |
| EV/FCFF | 25.35 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| lululemon athletica inc. | 13.25 |
| EV/FCFF, Sector | |
| Consumer Durables & Apparel | 14.32 |
| EV/FCFF, Industry | |
| Consumer Discretionary | 51.28 |
Based on: 10-K (reporting date: 2026-05-31).
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, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 62,364) | 106,594) | 104,390) | 162,770) | 171,505) | 248,614) | |
| Free cash flow to the firm (FCFF)2 | 2,441) | 3,590) | 6,941) | 5,156) | 4,694) | 6,203) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 25.54 | 29.69 | 15.04 | 31.57 | 36.54 | 40.08 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| lululemon athletica inc. | 18.00 | 24.76 | 35.33 | 120.71 | 42.97 | 69.99 | |
| EV/FCFF, Sector | |||||||
| Consumer Durables & Apparel | — | 28.29 | 18.95 | 36.97 | 37.72 | 42.57 | |
| EV/FCFF, Industry | |||||||
| Consumer Discretionary | — | 48.03 | 41.98 | 33.07 | 51.09 | 60.31 | |
Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 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).
3 2026 Calculation
EV/FCFF = EV ÷ FCFF
= 62,364 ÷ 2,441 = 25.54
4 Click competitor name to see calculations.
A comprehensive contraction in enterprise value is observed over the analyzed six-year period, coinciding with volatile free cash flow to the firm (FCFF) performance. The overall trajectory indicates a significant reduction in the company's market-based valuation relative to its operational cash generation.
- Enterprise Value (EV) Trend
- A consistent downward trajectory is evident, with EV decreasing from US$ 248,614 million in 2021 to US$ 62,364 million by 2026. This represents a substantial reduction in total enterprise valuation over the timeframe.
- Free Cash Flow to the Firm (FCFF) Performance
- Cash flow exhibits significant volatility. Following a decline in 2022, FCFF grew to a peak of US$ 6,941 million in 2024. However, a sharp contraction occurred in the subsequent two years, falling to US$ 2,441 million by 2026.
- EV/FCFF Ratio Interpretation
- The ratio experienced steady compression from 40.08 in 2021 to a minimum of 15.04 in 2024, suggesting a period of valuation realignment. A subsequent spike to 29.69 in 2025 was driven primarily by the precipitous drop in FCFF, while the final ratio of 25.54 in 2026 reflects a continued decline in enterprise value outpacing the decline in cash flows.
The convergence of declining enterprise value and weakening cash flows in the final two years suggests a deterioration in the company's valuation profile and operational efficiency.
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