Stock Analysis on Net
Stock Analysis on Net

Nike Inc. (NYSE:NKE)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin 

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Nike Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
May 31, 2024 39.50% = 14.96% × 2.64
May 31, 2023 36.20% = 13.51% × 2.68
May 31, 2022 39.57% = 14.99% × 2.64
May 31, 2021 44.86% = 15.17% × 2.96
May 31, 2020 31.52% = 8.10% × 3.89
May 31, 2019 44.57% = 16.99% × 2.62

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).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Nike Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
May 31, 2024 39.50% = 11.10% × 1.35 × 2.64
May 31, 2023 36.20% = 9.90% × 1.36 × 2.68
May 31, 2022 39.57% = 12.94% × 1.16 × 2.64
May 31, 2021 44.86% = 12.86% × 1.18 × 2.96
May 31, 2020 31.52% = 6.79% × 1.19 × 3.89
May 31, 2019 44.57% = 10.30% × 1.65 × 2.62

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).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Nike Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
May 31, 2024 39.50% = 0.85 × 0.96 × 13.57% × 1.35 × 2.64
May 31, 2023 36.20% = 0.82 × 0.96 × 12.68% × 1.36 × 2.68
May 31, 2022 39.57% = 0.91 × 0.96 × 14.88% × 1.16 × 2.64
May 31, 2021 44.86% = 0.86 × 0.96 × 15.62% × 1.18 × 2.96
May 31, 2020 31.52% = 0.88 × 0.95 × 8.12% × 1.19 × 3.89
May 31, 2019 44.57% = 0.84 × 0.97 × 12.61% × 1.65 × 2.62

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).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in operating profitability measured by EBIT margin ratio.

Two-Component Disaggregation of ROA

Nike Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
May 31, 2024 14.96% = 11.10% × 1.35
May 31, 2023 13.51% = 9.90% × 1.36
May 31, 2022 14.99% = 12.94% × 1.16
May 31, 2021 15.17% = 12.86% × 1.18
May 31, 2020 8.10% = 6.79% × 1.19
May 31, 2019 16.99% = 10.30% × 1.65

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).

The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Nike Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
May 31, 2024 14.96% = 0.85 × 0.96 × 13.57% × 1.35
May 31, 2023 13.51% = 0.82 × 0.96 × 12.68% × 1.36
May 31, 2022 14.99% = 0.91 × 0.96 × 14.88% × 1.16
May 31, 2021 15.17% = 0.86 × 0.96 × 15.62% × 1.18
May 31, 2020 8.10% = 0.88 × 0.95 × 8.12% × 1.19
May 31, 2019 16.99% = 0.84 × 0.97 × 12.61% × 1.65

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).

The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in operating profitability measured by EBIT margin ratio.

Disaggregation of Net Profit Margin

Nike Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
May 31, 2024 11.10% = 0.85 × 0.96 × 13.57%
May 31, 2023 9.90% = 0.82 × 0.96 × 12.68%
May 31, 2022 12.94% = 0.91 × 0.96 × 14.88%
May 31, 2021 12.86% = 0.86 × 0.96 × 15.62%
May 31, 2020 6.79% = 0.88 × 0.95 × 8.12%
May 31, 2019 10.30% = 0.84 × 0.97 × 12.61%

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).

The primary reason for the increase in net profit margin ratio over 2024 year is the increase in operating profitability measured by EBIT margin ratio.