Nike Inc. (NYSE:NKE)

Inventory Turnover

The inventory turnover ratio shows a general increasing trend from May 2020 through February 2022, rising from 2.87 up to 3.85. It then declines notably in subsequent periods, reaching a low around 2.67 in August 2022 before recovering somewhat and stabilizing between 3.3 and 3.8 in the latest periods through May 2025. This pattern suggests an initial improvement in inventory management followed by fluctuating efficiencies and a partial recovery.

Receivables Turnover

This ratio experienced a marked drop from 13.61 in May 2020 to a low of 9.03 in February 2023, indicating slower collection of accounts receivable. Afterward, a moderate recovery is evident, with values hovering around 10 to 12 in the more recent quarters. The trend reflects some challenges in receivables collections mid-period but some improvement thereafter.

Payables Turnover

The payables turnover ratio is volatile over the observed period. It rose sharply to 11.84 in August 2021 but then declined substantially to values around 7.5 to 9 in later periods, except a spike to 12.28 in August 2023. The fluctuations suggest inconsistent payment timing or changing supplier credit terms.

Working Capital Turnover

Working capital turnover shows a declining trend from May 2020 until February 2022, dropping from 3.05 to about 2.53, followed by a consistent upward trend thereafter, recovering to 3.62 by May 2025. This indicates improvement in using working capital to generate sales after a mid-term dip.

Average Inventory Processing Period

The average inventory processing period decreases steadily from 127 days in May 2020 to a low of 95 days in February 2021, indicating improved inventory turnover speed, then trends upward again, peaking near 137 days in August 2022. It declines once more toward 102-103 days by May 2025. This pattern mirrors inventory turnover changes and illustrates varying inventory management efficiency.

Average Receivable Collection Period

The receivables collection period initially lengthens from 27 days in May 2020 to around 40 days by February 2023, signifying slower collections. This metric improves after that, reducing to approximately 31-37 days in the recent periods but remains higher compared to the initial value, showing ongoing moderate collection challenges.

Operating Cycle

The operating cycle exhibits fluctuations, starting at 154 days in May 2020, dipping to 125 days in February 2021, then rising substantially to 175 days in August 2022, indicative of slower overall operational efficiency during that peak. It trends downwards after, stabilizing in the 130-140 day range by May 2025.

Average Payables Payment Period

This metric shows irregular variation, with periods of increase and decrease. Notably, after declining from 39 days in May 2020 to 31 days in November 2021, it rises sharply to 49 days in August 2022, then fluctuates around the mid-30s to lower 40s days thereafter. This suggests changes in payment policies or supplier negotiations.

Cash Conversion Cycle

The cash conversion cycle experienced some volatility, starting at 115 days in May 2020, rising to about 127 days in August 2022, and then decreasing towards 90-100 days in the latest periods, indicating improved operational cash flow efficiency more recently.

The data reveals notable fluctuations in cost of sales and inventories over the analyzed quarterly periods. Cost of sales exhibits a general cyclical pattern with some irregular variations. Initial values hover around the mid-5000s million USD range, dipping notably in May 2020 before resuming a rising trend into late 2022. After reaching a peak around November 2022, cost of sales declines gradually through the subsequent quarters until May 2025, indicating some potential moderation in expenses or sales volume during this period.

Inventories demonstrate a varying but generally upward trajectory, with several distinct phases. Starting near the 5800 million USD mark in August 2019, inventory levels increase sharply by mid-2020, peaking around 9660 million USD in August 2022. Following this peak, a downward trend is apparent, with inventory values decreasing steadily toward the mid-7000 million USD range by May 2025. This pattern suggests an accumulation of stock during mid-periods possibly to support anticipated sales or hedge against supply constraints, followed by a controlled reduction, indicative of inventory management efforts to optimize stock levels relative to demand.

The inventory turnover ratio, available from May 2020 onwards, exhibits a range between approximately 2.67 and 3.85 times. The ratio shows some volatility but generally remains within a tight band. Notably, turnover peaks in periods such as August 2021 and November 2021, implying efficient inventory movement in those quarters. A gradual improvement trend in turnover is observable post the lower values seen in mid-2020, suggesting enhanced inventory utilization or faster sales cycles in later quarters. The ratio remains moderately stable around the mid-3 range by early 2025, reflecting consistent operational performance in inventory management.

Overall, the patterns observed in cost of sales and inventories suggest responsive adjustments to market conditions, with inventory buildup in certain periods followed by controlled drawdowns. Inventory turnover data supports the view of effective management maintaining a balance between stock levels and sales activity, despite the inherent volatility in cost of sales. These insights collectively point to adaptive supply chain and sales strategies over the timeline analyzed.

The financial data exhibits notable fluctuations in revenues and accounts receivable, as well as variable receivables turnover ratios over the observed quarters.

Revenues

Revenues display a cyclical pattern with some volatility across quarters. Beginning at 10,660 million USD in August 2019, revenues decreased slightly towards early 2020, reaching a low point at 6,313 million USD in May 2020, which likely reflects external disruptions. Following this dip, revenues recovered sharply, peaking at 13,388 million USD in November 2023. However, there is a decline in later quarters, with revenues decreasing to 11,097 million USD by May 2025. This suggests a recovery phase after a significant contraction, followed by some tapering in growth towards the end of the period.

Accounts Receivable, Net

Accounts receivable trends somewhat mirror revenue fluctuations but with less volatility. The balance drops from 4,656 million USD in August 2019 to a trough of 2,749 million USD in May 2020, then rises steadily, reaching 5,437 million USD by November 2022. Subsequent quarters exhibit fluctuations within the 4,100 to 5,300 million USD range, ending at 4,717 million USD in May 2025. The higher receivables balance following the 2020 low could indicate extended credit terms or increased sales on account during recovery periods.

Receivables Turnover Ratio

The receivables turnover ratio provides insight into the efficiency of collections. The data shows elevated turnover figures in the quarters without missing values, with a peak at 13.61 in May 2020. This high turnover suggests rapid collection during that low sales period. Subsequently, turnover ratios fluctuate mostly between around 9 and 12.5. The moderate variability in turnover ratios indicates some changes in credit policies or collection effectiveness but no sustained downward or upward trend overall. The lowest turnover ratio recorded is 9.03, and the highest is 13.61, reflecting periodic adjustments in receivables management relative to sales.

In summary, the company's revenue experienced a pronounced decline around mid-2020, followed by a rebound phase which peaked in late 2023 and then tapered off moderately. Accounts receivable levels followed a similar trend but with a lag, suggesting a period of slower payment or credit extension after recovery. Receivables turnover displayed variability consistent with changes in collections pace and credit terms, without a clear directional trend. Together, these data points suggest active management of sales and collections in response to shifting economic conditions over the analyzed period.

Cost of Sales

The cost of sales figures have exhibited notable fluctuations over the analyzed periods. Initially, values hovered around the 5700 to 5800 million USD range from August 2019 to February 2020. A sharp decline occurred by May 2020, dropping to approximately 3960 million USD, likely reflecting external disruptions. Subsequently, there was a recovery and upward movement, reaching peaks above 7600 million USD by November 2022. Afterward, the cost of sales showed a modest decline and then stabilized near the 6600 to 7200 million USD range through mid-2025. Overall, the cost of sales demonstrates a recovery trend post early 2020 drop, with periodic increases and relative stabilization in recent quarters.

Accounts Payable

Accounts payable values showed some variability but generally maintained a range between approximately 1900 and 3500 million USD across the periods. Early values were around the 2700 million mark, with a dip in mid-2020 reaching a low near 1983 million USD. From late 2020 onward, payable figures rose steadily, peaking at approximately 3479 million USD in May 2025. Intermittent decreases occurred, but the general pattern indicates gradual growth in accounts payable, which may reflect changes in purchasing, credit terms, or cash management strategies over time.

Payables Turnover Ratio

The payables turnover ratio, available from May 2020 forward, showed significant variation. The ratio initially stood high at 9.41, increased to above 10 in subsequent quarters, and then fluctuated between around 7.5 and 12.3. Peaks near or above 10.5 occurred several times, notably in May 2021, November 2021, and May 2024, indicating periods when payables were paid down relatively quickly. Conversely, lower values near 7.5 to 8.5 suggest slower payment cycles at certain points. The data suggests the company adjusted payment speeds over time, possibly in response to cash flow needs or supplier relationships, with no consistent upward or downward trend but noticeable cyclicality.

Summary

Overall, the company’s cost of sales experienced a significant decline in early 2020, followed by recovery and moderate fluctuations around a higher plateau. Accounts payable showed an upward trajectory across the timeframe with periodic fluctuations. The payables turnover ratio varied cyclically without a clear directional trend, reflecting changing payment practices. These patterns indicate dynamic operational and financial management adapting to external and internal conditions over the analyzed periods.

The working capital displayed fluctuations over the analyzed periods, beginning at 8,158 million US dollars in August 2019 and experiencing an upward trend, peaking at 18,320 million US dollars in November 2021. Following this peak, a gradual decline is observed, reaching 12,796 million US dollars by August 2024. This pattern suggests cycles of increasing and then decreasing short-term liquidity or operational funding capacity over these intervals.

Revenues show variability with some seasonal or cyclical patterns. Initial revenues of 10,660 million US dollars in August 2019 displayed a declining trend toward May 2020 at 6,313 million US dollars, coinciding with a period of reduced working capital. Afterwards, revenues rebound significantly, peaking at 13,315 million US dollars in November 2022 before gradually decreasing again toward the end of the reported timeline, finishing at 11,097 million US dollars in May 2025. This cyclical behavior may reflect external economic or business environment factors impacting sales volumes or prices.

The working capital turnover ratio, which represents the efficiency with which working capital generates revenues, is not calculated for all periods but shows meaningful values from May 2020 onward. Initially, the ratio was relatively high at 3.05 but decreased to a low of 2.44 in May 2021, indicating less efficient use of working capital during this time. From this low point, a consistent upward trend is observed, reaching 3.62 by May 2025. This increasing turnover ratio suggests an improvement in managing working capital relative to revenue generation over time.

Overall, the data indicates periods of both expansion and contraction in working capital and revenues, accompanied by an improving trend in capital efficiency as shown by the working capital turnover ratio. This may reflect strategic adjustments in operational management to better align working capital with sales generation capacity.

Working Capital

Trend: Rise to a peak in late 2021 followed by gradual decline.

Range: From 8,158 million to 18,320 million USD, declining to approximately 12,796 million USD.

Revenues

Trend: Fluctuated with a notable dip in early 2020, recovery and peak late 2022, followed by moderate decline.

Range: Approximately 6,313 million to 13,315 million USD.

Working Capital Turnover

Trend: Decreased initially from 3.05 to 2.44, then steadily increased to 3.62.

Implication: Improved efficiency in using working capital to generate revenues over time.

The inventory turnover ratio exhibits notable fluctuations over the observed periods, with an overall trend reflecting recovery and stabilization after an initial increase. Starting from May 31, 2020, the ratio increases from 2.87 to a peak of 3.85 by February 28, 2022, indicating improved efficiency in inventory management during this interval. Subsequently, the ratio declines to 2.67 in August 31, 2022, suggesting a slowdown in inventory turnover. Following this dip, there is a steady upward movement, with the ratio stabilizing around the mid-3.0 range through to May 31, 2025, indicating consistent inventory turnover performance in the later periods.

Correspondingly, the average inventory processing period, measured in days, moves inversely to the inventory turnover ratio as expected. Initially, this period decreases from 127 days in May 31, 2020, down to 95 days by February 28, 2022, demonstrating faster inventory processing and movement through the supply chain. A subsequent increase occurs, reaching a high of 137 days on August 31, 2022, which aligns temporally with the noted dip in inventory turnover ratio. This suggests a temporary inefficiency or buildup in inventory. From this point forward, the average inventory processing period shows a gradual reduction to approximately 102-103 days by May 31, 2025, reflecting incremental gains in inventory turnover speed and operational efficiency.

Overall, the data indicates that after an initial phase of inventory processing improvement, there was a period marked by slower inventory movement and increased holding times around mid-2022. This was followed by a recovery phase, with both metrics trending toward enhanced inventory management efficiency approaching mid-2025. The trend suggests effective responses to operational challenges and a strategic focus on optimizing inventory cycles in the latter periods.

Receivables Turnover

The receivables turnover ratio shows variability over the observed periods, starting from a high of 13.61 and then declining notably to 9.79. Subsequently, it fluctuates mostly between 9.03 and 12.4, without establishing a clear upward or downward long-term trend. Peaks are observable around early 2022 and late 2023, with values of 12.36 and 12.4 respectively, indicating periods of more efficient collection of receivables. However, there are also troughs, such as 9.03 in early 2023 and 9.24 in late 2024, suggesting less effective receivables management in those quarters. Overall, the ratio remains within a moderate range, demonstrating some cyclical variation in collection efficiency.

Average Receivable Collection Period

The average receivable collection period exhibits an inversely related pattern to the receivables turnover, as expected. It begins at 27 days, then extends sharply to 37 days, peaking at 40 days in early 2023, indicating slower collection of receivables during that time. Following these higher values, the collection period decreases to a low of 29 days and shows moderate fluctuations between approximately 29 and 40 days thereafter. The notable increases around early 2023 and late 2024 correspond with the troughs in the receivables turnover, reinforcing the interpretation of slower receivables collection during these intervals. The collection period generally oscillates, suggesting variable liquidity impacts from receivables management.

Overall Analysis

The data points to moderately fluctuating receivables management over the periods observed, characterized by cyclical increases and decreases in both receivables turnover and average collection period. While there are intervals indicating efficient receivables processes, interspersed are quarters suggesting some difficulty in collecting receivables promptly. This variability may reflect seasonal sales patterns, changes in customer payment behavior, or adjustments in credit policies. The company’s ability to maintain the receivables turnover ratio largely above 9 and the collection period mostly below 40 days suggests a generally stable but dynamic receivables environment.

The data reveals several key trends in the company's operational efficiency over multiple fiscal quarters. The focus is on three financial metrics: the average inventory processing period, the average receivable collection period, and the overall operating cycle, all expressed in number of days.

Average Inventory Processing Period

This period demonstrates fluctuations throughout the observed timeframe. After an initial period with incomplete data, the metric starts at 127 days and generally trends downward, reaching a low of 95 days. Subsequently, it shows some variability, peaking at 137 days before gradually decreasing again to approximately 102-109 days range in the most recent quarters. This pattern suggests ongoing efforts to improve inventory turnover, although some periods indicate challenges possibly related to supply chain or demand fluctuations.

Average Receivable Collection Period

The collection period presents moderate variability, initially recorded at 27 days and rising to a peak of 40 days at certain points. The data shows this period oscillates mostly between 29 and 40 days without a clear sustained directional trend. This implies relatively stable but occasionally fluctuating credit management performance, with periods of extended collections suggesting potential delays in receivables.

Operating Cycle

The operating cycle, which combines inventory and receivables periods, mirrors the fluctuations seen in the individual components. It starts near 154 days, decreases briefly to around 125 days, then rises to a peak of 175 days before a subsequent decline to approximately 130-140 days range in the latest periods. This indicates that overall operational efficiency experienced intermittent challenges but shows signs of returning toward improved performance.

In summary, the company’s operational metrics indicate a dynamic environment with varying degrees of efficiency related to inventory processing and receivables collection. While there is evidence of efforts to reduce days in inventory and maintain receivable collection within a consistent range, occasional increases in these periods have affected the overall operating cycle. Continuous monitoring and targeted improvements would be necessary to achieve greater stability and efficiency in these financial components.

The payables turnover ratio displays notable fluctuations over the observed periods. Starting at 9.41, it increases to a peak of 11.84 before declining towards values around 7.51 and 7.64. Subsequently, it trends upward again, reaching a maximum of 12.28, followed by another decline to values near 7.62 by the final period. This pattern suggests variability in the company's efficiency in managing its accounts payable, with periods of faster turnover interspersed with slower ones.

Correspondingly, the average payables payment period, measured in days, exhibits an inverse trend relative to the payables turnover ratio. Initial data points reveal a decrease from 39 days to a low of 31 days, indicating quicker payments. This period is then succeeded by a gradual increase, peaking at 49 days before descending again to 34 days. The payment period experiences further variability around the mid-30s range before lengthening to 44-48 days towards the end of the timeline.

The inverse relationship between these two metrics aligns with typical financial behavior: a higher payables turnover corresponds with a shorter payment period, and vice versa. The variations observed may reflect changes in payment policies, supplier negotiations, or cash flow management strategies over time. Periods of increased turnover and reduced payment days suggest an emphasis on faster supplier payments, whereas declines in turnover and increases in payment days could indicate extended payment terms or cash preservation efforts.

Average Inventory Processing Period

The average inventory processing period shows a generally fluctuating pattern over the observed quarters. Beginning at 127 days in May 2020, it declined steadily to a low of 95 days by February 2021, indicating improved efficiency in inventory turnover. Following this, the period increased again, peaking at 137 days in November 2022, suggesting slower inventory movement during that time. After this peak, the metric decreased once more, reaching 102–103 days by February and May 2025, signaling a partial recovery in inventory processing speed.

Average Receivable Collection Period

This period exhibits some variability around a range of approximately 27 to 40 days. From May 2020 (27 days), the collection period trended upward to reach a peak of 40 days in February 2023, indicating that receivables were collected more slowly during that timeframe. After this apex, the period decreased to around 29–34 days through mid-2023, with minor fluctuations through to May 2025, suggesting some stabilization in collection efficiency though not to earlier lower levels.

Average Payables Payment Period

The payables payment period fluctuates noticeably within the range of 30 to 49 days. Initially, from May 2020 at 39 days, it varied downward to a low of 31 days in August 2021, denoting quicker payments to suppliers. Subsequently, it climbed to the highest recorded value of 49 days in August 2022, indicating extended payment terms or delayed payments. Afterward, the period fluctuated but generally trended between 34 and 44 days, remaining higher than the initial quarter, which may imply changes in supplier management or payment policies.

Cash Conversion Cycle

The cash conversion cycle closely mirrors trends seen in the other periods. Starting at 115 days in May 2020, the cycle initially increased slightly to 118 days in August 2020, then declined to 84 days by February 2021, reflecting improved cash flow efficiency. After this, the cycle extended again, reaching a peak of 127 days during both November 2022 and February 2023, indicating slower cash flow turnover. The cycle contracted once more, falling to 92 days by May 2025, signaling an overall improvement in cash conversion towards the end of the period.