Nike Inc. (NYSE:NKE)

The financial leverage and debt-related ratios demonstrate notable variations over the observed periods. Initially, the debt to equity ratio was stable around 0.4 until early 2020, after which a significant increase is observed peaking near 1.2 in May 2020, likely related to increased liabilities or decreased equity within that timeframe. Post this peak, there is a consistent decline and stabilization around 0.6 to 0.65 from late 2020 through mid-2025. When operating lease liabilities are included, the debt to equity ratio follows a similar pattern but remains higher, starting at 0.74 and peaking at 1.62 in May 2020 before gradually decreasing and stabilizing between 0.8 and 0.87 in subsequent periods.

Similar trends are seen in the debt to capital ratio, which increases sharply in mid-2020 from about 0.28 to around 0.55 and then steadily decreases to approximately 0.38 by the end of the observed periods. The inclusion of operating lease liabilities raises this ratio consistently by roughly 10-15 percentage points. Debt to assets ratios also mirror this pattern, rising steeply around mid-2020 and then gradually declining and stabilizing, with and without operating lease liabilities. Including operating leases raises debt to assets from around 0.13 to 0.31 at the peak and then stabilizes around 0.30 to 0.33.

Financial leverage shows a clear increase reaching its highest point (about 3.89) in May 2020, followed by a steady decrease to levels slightly below 3.0 in the following years, with minor fluctuations around 2.6 to 2.7. This suggests a reduction in reliance on debt or an increase in equity capitalization after the peak period.

Overall, the data indicate a substantial rise in leverage and debt-related ratios around mid-2020, which could relate to external factors affecting capital structure or operations during that period. Following this peak, there is a discernible trend towards deleveraging or improved equity positions resulting in more stable and moderate leverage metrics. The persistence of elevated ratios when including operating lease liabilities highlights the significance of lease obligations in the company's capital structure analysis.

Debt to Equity

Stable near 0.4 pre-2020, peak at 1.2 in mid-2020, then decline and stabilization around 0.6-0.65.

Including operating leases, higher levels throughout, peaking at 1.62, then stabilizing between 0.8-0.87.

Debt to Capital

Sharp increase in mid-2020 from ~0.28 to ~0.55, followed by gradual decrease to ~0.38.

With leases, consistently 10-15 percentage points higher.

Debt to Assets

Rise in mid-2020 from ~0.13 to ~0.31, then stabilization around 0.22-0.25 without leases.

With leases, peaks at ~0.42 and stabilizes near 0.30-0.33.

Financial Leverage

Peaked at 3.89 in May 2020, then declined to approximately 2.6-2.7 afterward.

The analysis of the quarterly financial data highlights several key trends regarding the company's leverage and equity position over the specified periods.

Total Debt

The total debt experienced a significant increase in May 2020, rising sharply from 3,476 million US dollars in February 2020 to 9,657 million US dollars in May 2020. Following this spike, total debt remained relatively stable with minor fluctuations around the 9,400 million US dollar mark for most subsequent quarters until May 2025, where a notable reduction to 7,966 million US dollars is observed. This suggests a strategic reduction of debt in the most recent quarter.

Shareholders’ Equity

Shareholders’ equity displayed some volatility but generally followed an upward trend from August 2019 through August 2022, increasing from 9,200 million US dollars to a peak of 15,822 million US dollars. Afterward, it declined gradually to 13,213 million US dollars by May 2025. This pattern indicates initial growth in equity capital before a moderate contraction in the latter periods.

Debt to Equity Ratio

The debt to equity ratio aligns closely with the movements in total debt and shareholders’ equity. It remained relatively low and stable at approximately 0.4 until February 2020. Following the marked increase in debt in May 2020, the ratio surged to 1.2, indicating a significant rise in financial leverage. Subsequently, the ratio steadily declined, reflecting improving equity or controlled debt levels, stabilizing around 0.6 in later periods. The ratio's reduction towards the end suggests a deliberate effort to enhance the capital structure and reduce leverage risk.

In summary, the data reveal an initial period of low leverage which was disrupted by a large increase in debt in mid-2020, possibly to address liquidity needs or strategic investments. Over time, the company has managed to stabilize and reduce its leverage, supported by relatively strong equity levels. The recent decline in total debt coupled with a moderately decreased equity base indicates a cautious deleveraging approach in the most current periods.

The financial data reveals several notable trends regarding the company’s leverage and equity position over the analyzed periods.

Total Debt (including operating lease liability)

The total debt showed a significant increase from August 2019 to May 2020, nearly doubling from approximately $6.8 billion to $13 billion. This spike suggests a major change in the company’s financing or lease obligations during that period. Following this peak, the total debt stabilized somewhat but exhibited a gradual decline from May 2020 onward, reaching approximately $11 billion by May 2025. The overall trend post-May 2020 indicates conservative debt management and a gradual reduction in liabilities over time.

Shareholders’ Equity

Shareholders’ equity demonstrated initial volatility, with a decrease from about $9.2 billion in August 2019 to $8.1 billion in May 2020. After this trough, there was a steady increase in equity through to November 2021, reaching a peak near $15 billion. Subsequent to November 2021, the equity levels showed modest fluctuations but generally hovered around $13 to $14 billion until the end of the period in May 2025. This pattern indicates recovery and reinforcement of the equity base after the mid-2020 dip, with some stabilization in recent years.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio rose sharply from approximately 0.74 in late 2019 to a high of 1.62 in May 2020, coinciding with the spike in total debt and reduction in equity. This suggests heightened leverage and increased financial risk during that period. After May 2020, the ratio declined steadily, moving below 1.0 by May 2021, and fluctuated mildly around 0.8 to 0.9 thereafter, ending near 0.83 in May 2025. This decreasing trend indicates improved capital structure and reduced reliance on debt financing relative to equity over time.

In summary, the company experienced a significant increase in debt and leverage in early 2020, possibly related to external challenges or strategic adjustments. Following this, there was a clear effort to deleverage and strengthen the equity base, leading to a more balanced financial structure through to 2025. The stabilization of the debt-to-equity ratio below 1.0 indicates a return to a more conservative leverage profile, supporting financial flexibility and reduced risk.

The analysis of the quarterly financial data reveals distinct trends in the company's capital structure and indebtedness over the observed periods.

Total Debt

Total debt exhibited significant fluctuation throughout the timeline. Initially, it remained relatively stable from August 2019 through February 2020, around the 3,700 US$ million mark, before surging sharply in May 2020 to approximately 9,657 US$ million, likely indicating a strategic increase in borrowing.

Following this spike, total debt decreased slightly and then stabilized around 9,400 US$ million for an extended duration until early 2023. Subsequently, there is a downward trend beginning in mid-2023, with total debt reducing from approximately 8,933 US$ million to 7,966 US$ million by May 2025, suggesting efforts to deleverage or repay debt in recent periods.

Total Capital

Total capital showed a consistent upward trajectory from August 2019, starting at about 12,919 US$ million and rising steadily to a peak near 25,253 US$ million in August 2022. This growth indicates expansion and strengthening of the overall capital base.

After this peak, total capital experienced a gradual decline to 21,179 US$ million by May 2025, indicating a potential contraction in capital resources or asset base over the more recent quarters.

Debt to Capital Ratio

The debt to capital ratio reveals important changes in the company's financial leverage. Initially, the ratio remained low and stable around 0.28-0.29 through February 2020.

However, it increased sharply to 0.55 in May 2020, coinciding with the spike in total debt, reflecting a significant leverage increase. Thereafter, the ratio gradually declined and stabilized around 0.38 to 0.39 from mid-2021 onwards.

This longer-term stabilization suggests that after the peak leverage period, the company maintained a relatively consistent capital structure with about 38-39% of its capital financed through debt.

Overall, the trends indicate a period of heightened leverage around mid-2020, likely corresponding with strategic financing decisions, followed by stabilization and a recent modest reduction in debt levels. The company's total capital expanded significantly prior to mid-2022 but has since contracted. The company's current leverage ratio suggests a moderate and stable use of debt relative to capital.

The financial data reveals several notable trends concerning the company's debt levels, total capital, and leverage ratios over the analyzed periods.

Total Debt (Including Operating Lease Liability)

The total debt exhibited a relatively stable pattern from August 2019 through February 2020, maintaining values around the 6,600 to 6,900 million US$ range. However, a significant increase occurred by May 2020, with debt nearly doubling to over 13,000 million US$. Following this peak, the total debt gradually declined over subsequent periods, reaching approximately 11,000 million US$ by May 2025. This overall reduction suggests a deleveraging trend after an initial surge in liabilities.

Total Capital (Including Operating Lease Liability)

Total capital initially rose steadily from about 16,000 million US$ in August 2019 to over 27,000 million US$ by August 2021, indicating expansion or increased capitalization. After peaking, total capital showed some fluctuation but generally trended downward from late 2022 onward, ending near 24,200 million US$ by May 2025. This decline in capital base toward the later periods may reflect changes in asset base or financing structure.

Debt to Capital Ratio (Including Operating Lease Liability)

The leverage ratio started at approximately 0.43, remaining almost stable until February 2020 before increasing sharply to a peak of around 0.62 by May 2020, coinciding with the spike in total debt. This jump suggests a period of increased financial risk or reliance on debt financing. Thereafter, the ratio steadily decreased, stabilizing between 0.44 and 0.47 during most of the subsequent periods. By the end of the series, the ratio moderated to about 0.45, indicating a partial restoration of a more balanced capital structure.

In summary, the data indicates a pronounced increase in debt and leverage during early 2020, potentially linked to external or strategic factors. Following this peak, gradual deleveraging and a contracting capital base are observable, with leverage ratios stabilizing at moderately lower levels. This overall trend reflects active management of the company's capital structure and debt levels in response to changing financial conditions.

The financial data reveals significant fluctuations in debt levels and assets over the analyzed periods.

Total Debt

Total debt increased sharply from approximately 3,476 million USD in February 2020 to a peak near 9,657 million USD in May 2020. Following this surge, the debt level stabilized around the 9,400 million USD mark through most subsequent quarters until a downward trend appears from May 2023, declining to about 7,966 million USD by May 2025. This indicates a major borrowing event in early 2020, likely related to external circumstances, followed by consistent debt management and gradual deleveraging after 2023.

Total Assets

Total assets showed a generally upward trajectory from about 26,220 million USD in February 2020 to a high near 41,088 million USD in August 2022. After this peak, assets declined progressively to approximately 36,579 million USD by May 2025. The growth phase suggests investments or asset accumulation over the period until mid-2022, followed by asset reductions or depreciation in later quarters.

Debt to Assets Ratio

The debt to assets ratio escalated notably from around 0.13 in February 2020 to 0.31 in May 2020, reflecting the sharp increase in debt against a still growing asset base. Subsequently, the ratio decreased steadily, stabilizing around 0.23 to 0.25 through most quarters until mid-2024, with a slight decrease to 0.22 by May 2025. This pattern indicates improved leverage management post initial debt spike, achieving a more balanced capital structure over time.

In summary, the data demonstrates a significant debt increase during early 2020, likely driven by external factors necessitating capital acquisition. The total asset growth through 2022 suggests active investment or expansion, while the later declines in both debt and assets indicate efforts to reduce leverage and streamline the asset base. The debt to assets ratio movement corroborates these observations, highlighting the initial spike in leverage and subsequent stabilization towards more conservative levels.

Total debt (including operating lease liability)

The total debt showed an initial increase starting from US$6,821 million in August 2019 to a peak of approximately US$13,015 million in May 2020. Following this peak, a gradual downward trend is evident, with minor fluctuations around the US$12,500 million to US$12,800 million range until early 2023. From mid-2023 onwards, total debt steadily declined, reaching US$11,018 million by May 2025. This overall pattern indicates an initial increase in leverage followed by a prolonged period of debt reduction.

Total assets

Total assets increased consistently from US$26,249 million in August 2019 to a maximum of approximately US$41,088 million in August 2022. This growth phase was interrupted by a decline to US$39,647 million in November 2022 and continued weakening through 2023 and into 2025, ultimately declining to US$36,579 million by May 2025. Thus, the asset base expanded significantly over the first three years before experiencing a moderate contraction in the most recent periods.

Debt to assets (including operating lease liability)

The debt to assets ratio depicted a marked increase from 0.25-0.26 levels pre-2020 to a pronounced peak of 0.42 in May 2020, reflecting the sharp rise in debt relative to assets during that quarter. Subsequently, the ratio declined steadily and stabilized around the 0.31 to 0.33 range through 2021 and 2022. In the years that followed, this ratio held relatively steady with minor fluctuations before trending slightly downward to 0.30 by May 2025, suggesting improved leverage management relative to asset levels in later periods.

Summary

The overall financial trends indicate a significant increase in total debt and debt to asset ratio during early 2020, likely corresponding to an external shock or strategic financing event. Following this period, total debt was methodically reduced while assets initially continued to grow. However, starting in late 2022, total assets began to decline, signaling possible asset divestments or valuation adjustments. Concurrently, leverage ratios improved moderately but remained above pre-2020 levels, pointing to a cautious deleveraging strategy amid evolving asset conditions.

The analysis reveals several noteworthy trends in the financial data over the reported periods.

Total Assets

Total assets demonstrated a general upward trend starting from US$26,249 million in August 2019, reaching a peak around May 2020 at US$31,342 million. A steady increase continued through February 2023, where assets peaked near US$41,088 million. After this peak, total assets exhibited a gradual decline, falling to approximately US$36,579 million by May 2025. This pattern indicates a phase of asset expansion followed by a moderate contraction or stabilization in recent quarters.

Shareholders' Equity

Shareholders’ equity initially fluctuated modestly but generally increased from US$9,200 million in August 2019 to a high near US$15,822 million by August 2022. Post this peak, the equity values declined consistently, down to about US$13,213 million by May 2025. The rise in equity during the early periods suggests capital accumulation or profit retention, while the subsequent decline may reflect distributions, losses, or adjustments in valuation.

Financial Leverage Ratio

The financial leverage ratio started at approximately 2.85 in August 2019 and increased markedly to 3.89 by May 2020, indicating a substantial rise in asset funding through debt relative to equity during this period. Afterwards, leverage decreased steadily, reaching a low near 2.60 between August 2022 and November 2022. Following this, the ratio experienced a slight increase, fluctuating around 2.7 to 2.8 towards the end of the timeline. This suggests an initial strong dependence on financial leverage that was subsequently reduced, possibly due to deleveraging efforts, before stabilizing at a moderate level.

In summary, the company experienced asset growth and equity accumulation up to approximately mid-2022, followed by a period of asset reduction and decreasing equity. Financial leverage peaked early in the timeline and later moderated, indicating shifting financing strategies over the periods analyzed.