Nike Story

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NKE -- USA Stock  

USD 140.72  0.58  0.41%

Nike Inc is scheduled to announce its earnings today. The next earnings report is expected on the 17th of December 2020. Nike Revenue Per Employee is projected to decrease significantly based on the last few years of reporting. The past year's Revenue Per Employee was at 494,706. The current year Earnings Before Interest Taxes and Depreciation Amortization EBITDA is expected to grow to about 4.7 B, whereas Enterprise Value is forecasted to decline to about 129.9 B. While some of us are becoming more enthusiastic about consumer cyclical space, let's digest Nike Inc in greater detail to make a better estimate of its debt utilization.
Published over three months ago
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Should I hold on to my Nike (NYSE:NKE) position?
The company has 13.02 B in debt with debt to equity (D/E) ratio of 1.62, which is OK given its current industry classification. Nike Inc has a current ratio of 2.43, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. The company has Net Profit Margin of 6.79 %, which may imply that it executes well on its competitive polices and has reasonable control over its expenses and variable costs. This is very large. In the same way, it shows Net Operating Margin of 11.32 %, which entails that for every 100 dollars of revenue, it generated 0.11 of operating income.
Nike financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Nike, including all of Nike's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Nike assets, the company is considered highly leveraged. Understanding the composition and structure of overall Nike debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Nike Total Liabilities

Nike Inc liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Nike Inc has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Nike balance sheet include debt obligations and money owed to different Nike vendors, workers, and loan providers. Below is the chart of Nike short long-term liabilities accounts currently reported on its balance sheet.
You can use Nike Inc financial leverage analysis tool to get a better grip on understanding its financial position

How important is Nike's Liquidity

Nike financial leverage refers to using borrowed capital as a funding source to finance Nike Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Nike financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Nike's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Nike, but it might be worth checking our own buy vs. sell analysis

Breaking down Nike Indicators

The latest bullish price patterns experienced by current Nike Inc shareholders may encourage shareholders to take a closer look at the firm as it is trading at a share price of 116.87 on slow start in trading volume. The company executives have been very successful in rebalancing the firm assets at opportune times to take advantage of market volatility in August. The stock standard deviation of daily returns for 30 days investing horizon is currently 1.81. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.

Liabilities Breakdown

Tax Liabilities
7.5 B
Current Liabilities
16.2 B
Long-Term Liabilities
Total Liabilities25.13 Billion
Current Liabilities7.49 Billion
Long-Term Liabilities16.19 Billion
Tax Liabilities2.63 Billion

Over 3 percent surge for Nike. What does it mean for shareholders?

Latest value at risk indicator falls down to -2.71. Possible price growth? Nike Inc has relatively low volatility with skewness of -1.01 and kurtosis of 3.81. However, we advise all investors to independently investigate Nike Inc to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

Our Bottom Line On Nike Inc

Although many of the other players within the footwear & accessories industry are still a little expensive, even after the recent corrections, Nike may offer a potential longer-term growth to shareholders. While some shorter-term oriented shareholders may not share our view, we believe it may be a good time to buy new shares of Nike.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Nike Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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