How to Read a Financial Statement Table: Nike Case Study
If you wanna learn how to read a financial statement table, you have to read the labels before the numbers. The title, the period, the unit scale, and the column years tell you what every number actually means. In this guide we will do it with a real public listed company: Nike, using its annual report (Form 10-K) for the fiscal year ended May 31, 2026. Every number below has been derived from that filing, so you can open it by following this link and check each line yourself.
Quick answer: To read a financial statement table, check these five things in order:
- Statement and period: income statement, balance sheet, or cash flow, and which period it covers.
- Unit scale: dollars, thousands, or millions.
- Column years: newest is usually first and then comparative follows.
- Rows: read down to each subtotal and total.
- Compare years: look at the change, then check that the statements tie together.
By Muhammad Faisal Gurmani, Chartered Accountancy (CA) Finalist, Intuit Academy tax and QuickBooks certified. Last updated October 2026.
Whether you are a student studying for an exam, a business owner trying to understand your own numbers, or an accountant who wants a faster way to review a filing, the same method works. Here is where to jump in:
- Student: start with the five steps, then try the practice questions.
- Business owner: read the ratios section and the business owner checklist.
- Accountant or analyst: go to the tie-outs and the analytical review points.
- Anyone who wants to use AI: see how to read any 10-K with Claude for free.
How to Read a Financial Statement Table in 5 Steps
Step 1: Identify the statement and the period
Start with the heading. Nike's statements are titled things like "Consolidated Statements of Income" and "Consolidated Balance Sheets." "Consolidated" means the numbers combine Nike, Inc. and its subsidiaries. The next thing to find is the period. Nike's fiscal year ends on May 31, not December 31. So "fiscal 2026" runs from June 1, 2025 to May 31, 2026. Many companies use calendar years, but plenty do not, so never assume.
The annual report is called a Form 10-K. Public US companies also file a Form 10-Q for each quarter. The 10-Q covers three months and is usually unaudited, which means you should read it as an update, not as a full year.
Step 2: Read the unit scale
Under the title you will see "(In millions, except per share data)." That means Nike's revenue of 46,398 is $46,398 million, or about $46.4 billion. Earnings per share is the exception, shown in actual dollars ($2.10). Mixing up the scale is the most common beginner mistake.
Step 3: Check the column years
Columns are time periods and rows are line items. Nike's income statement and cash flow statement show three years (2026 (current year), 2025, 2024 (comparative years)), while the balance sheet shows only two year-end dates (May 31, 2026 and 2025). That is normal: larger US public companies typically show three years of income and cash flow figures but two balance sheet dates. The newest year is on the left here. Most US filings do this, but check every time.
Step 4: Read the rows down to the totals
Read from the top to the first subtotal, then to the next. Watch the sign conventions, because they are not the same everywhere. On Nike's income statement, costs are shown as positive numbers and subtracted. But look at "Interest (income) expense, net." The figure is (50). Parentheses here mean Nike earned $50 million more interest than it paid, so it is net income, not expense. Always read the label, not just the sign.
Step 5: Compare years, then check the connections
One number tells you little. Direction tells you more: did revenue grow, did margins shrink, did debt rise? Then check that the statements agree with each other, which we do in the tie-out section.This is called variation percentage.These percentages matter a lot in external audit.These are audit risk factors on which we focus to design our responses to assessed risks.These are called analytical procedures in which we relationship between financial and non financial data.As an auditor, i perform analytical procedures to identify risks at planning and audit stage and then design our responses accordingly.
How to Read the Nike Income Statement (Consolidated Statements of Income)
The income statement shows performance for a period. It starts with revenue at the top and subtracts costs until it reaches net income at the bottom. Here is Nike's, from page 55 of the 10-K, in millions of dollars:
| Year ended May 31, | 2026 | 2025 | 2024 |
|---|---|---|---|
| Revenues | 46,398 | 46,309 | 51,362 |
| Cost of sales | 26,487 | 26,519 | 28,475 |
| Gross profit | 19,911 | 19,790 | 22,887 |
| Demand creation expense | 4,754 | 4,689 | 4,285 |
| Operating overhead expense | 11,360 | 11,399 | 12,291 |
| Total selling and administrative expense | 16,114 | 16,088 | 16,576 |
| Interest (income) expense, net | (50) | (107) | (161) |
| Other (income) expense, net | (53) | (76) | (228) |
| Income before income taxes | 3,900 | 3,885 | 6,700 |
| Income tax expense | 792 | 666 | 1,000 |
| Net income | 3,108 | 3,219 | 5,700 |
| Diluted earnings per share ($) | 2.10 | 2.16 | 3.73 |
Revenue and cost of goods sold
The top line is revenues: $46,398 million in fiscal 2026, essentially flat versus $46,309 million the year before (up 0.2%). It was down 9.8% in fiscal 2025 compared with fiscal 2024. Nike calls its cost of goods sold "cost of sales." Subtract it from revenue and you get gross profit: $19,911 million. Divide gross profit by revenue and you get the gross profit margin, 42.9%, up slightly from 42.7%.
Selling and administrative expense (what most people call SG&A)
Nike does not use the label "SG&A." It reports total selling and administrative expense, which is the same idea, and splits it in two:
- Demand creation expense ($4,754 million): advertising and promotion, plus sports marketing, which includes endorsement contracts with athletes.
- Operating overhead expense ($11,360 million): mainly wages, benefits, and other administrative costs.
Together they are 34.7% of revenue, the same as last year. Notice what changed over two years, though. Selling and administrative expense was 32.3% of revenue in fiscal 2024. Revenue fell while expenses held up, and that squeezed profit.
Operating income, interest, and taxes
Nike's income statement has no line called "operating income." You can calculate it as gross profit minus selling and administrative expense: 19,911 minus 16,114 is 3,797. That is my own calculation, not a number Nike reports, so label it as calculated whenever you use it. After that come net interest income of 50 and other net income of 53, which lift pre-tax income to $3,900 million. Tax of $792 million is an effective tax rate of 20.3% (792 divided by 3,900), up from 17.1%. The 10-K says the earlier year included a one-time, non-cash deferred tax benefit.
Net income and Nike revenue vs net income
The bottom line is net income: $3,108 million, or $2.10 per diluted share. Compare it with revenue and you see why the table needs two readings:
| Measure | FY2026 | FY2025 | FY2024 |
|---|---|---|---|
| Revenue growth | +0.2% | -9.8% | n/a |
| Net income growth | -3.4% | -43.5% | n/a |
| Gross profit margin | 42.9% | 42.7% | 44.6% |
| Selling and admin. expense as % of revenue | 34.7% | 34.7% | 32.3% |
| Net profit margin | 6.7% | 7.0% | 11.1% |
| Effective tax rate | 20.3% | 17.1% | 14.9% |
Revenue was flat in fiscal 2026, but net income fell 3.4%, mostly because the tax rate rose. Go back one more year and the story is bigger: revenue dropped 9.8% in fiscal 2025 and net income dropped 43.5%. When sales fall and costs do not, profit falls much faster. That one comparison is worth more than any single number in the table.
Read the MD&A too. The 10-K explains that Nike recognized a $986 million benefit in cost of sales in the fourth quarter for the recovery of tariffs paid, which largely offset the impact of tariffs recognized during fiscal 2026. A table alone would not tell you that. This is why professionals always read the Management's Discussion and Analysis next to the statements.
How to Read the Nike Balance Sheet (Consolidated Balance Sheets)
The balance sheet is a snapshot on one date, here May 31. It follows one rule: total assets must equal total liabilities plus shareholders' equity. In millions of dollars, from page 57:
| May 31, | 2026 | 2025 |
|---|---|---|
| Cash and equivalents | 7,563 | 7,464 |
| Short-term investments | 1,464 | 1,687 |
| Accounts receivable, net | 5,931 | 4,717 |
| Inventories | 7,501 | 7,489 |
| Prepaid expenses and other current assets | 2,144 | 2,005 |
| Total current assets | 24,603 | 23,362 |
| Property, plant and equipment, net | 4,796 | 4,828 |
| Operating lease right-of-use assets, net | 2,838 | 2,712 |
| Identifiable intangible assets, net | 259 | 259 |
| Goodwill | 240 | 240 |
| Deferred income taxes and other assets | 5,674 | 5,178 |
| Total assets | 38,410 | 36,579 |
| Current portion of long-term debt | 2,000 | 0 |
| Accounts payable | 3,600 | 3,479 |
| Current portion of operating lease liabilities | 478 | 502 |
| Accrued liabilities | 6,092 | 5,916 |
| Income taxes payable | 377 | 669 |
| Total current liabilities | 12,547 | 10,566 |
| Long-term debt | 5,942 | 7,961 |
| Operating lease liabilities | 2,613 | 2,550 |
| Deferred income taxes and other liabilities | 2,443 | 2,289 |
| Capital in excess of stated value (plus common stock of 3) | 15,161 | 14,198 |
| Accumulated other comprehensive income (loss) | (141) | (258) |
| Retained earnings (deficit) | (155) | (727) |
| Total shareholders' equity | 14,865 | 13,213 |
| Total liabilities and shareholders' equity | 38,410 | 36,579 |
To save space I combined common stock (3) with capital in excess of stated value (15,158 in 2026, 14,195 in 2025), which gives 15,161 and 14,198.
Start with the two totals
Total assets are $38,410 million. Total liabilities are $23,545 million (38,410 minus equity) and shareholders' equity is $14,865 million. 23,545 plus 14,865 is 38,410, so it balances.
Current assets and Nike inventory levels
Current assets are things Nike expects to turn into cash within a year. Three lines deserve a look:
- Inventories ($7,501 million): essentially flat from $7,489 million. The 10-K says units increased but product mix offset it. Inventory is the number to watch for a company that sells shoes and apparel, because unsold stock can force discounts. Nike values it at the lower of cost and net realizable value using an average or specific identification cost basis, not LIFO. If you want to see why that matters, read my guide on LIFO vs FIFO under GAAP and IFRS.
- Accounts receivable ($5,931 million): money customers, mostly retailers, still owe Nike. It rose by $1,214 million (about 26%) while revenue barely moved. The cash flow statement and MD&A explain part of it: a tariff recovery receivable of $684 million sits inside this line, plus higher wholesale revenue.
- Prepaid expenses and other current assets ($2,144 million): payments made in advance and other short-term items. If that line confuses you, my guide on prepaid expenses as a current asset explains the logic.
Non-current assets, including leases
Nike also reports $2,838 million of operating lease right-of-use assets, which is the value of its right to use leased stores and offices. Whether those assets are current or non-current is a common question, covered in my post on right-of-use assets. The matching lease liabilities are split in two: $478 million current and $2,613 million non-current.
Liabilities: why $2,000 million moved to current
Last year Nike had no current portion of long-term debt. This year it shows $2,000 million. The debt note explains why: two $1,000 million notes mature on November 1, 2026 and March 27, 2027, both within 12 months of the balance sheet date, so they are reclassified from long-term to current. Total borrowings barely changed (7,942 versus 7,961). Only their classification did, and that pushed current liabilities up from $10,566 million to $12,547 million.
Shareholders' equity and the retained deficit
Look at retained earnings: it is (155). A negative balance is called a retained deficit. It does not mean Nike is in trouble. Total equity is still a positive $14,865 million. It happens because dividends and share repurchases charged to retained earnings have been larger than net income in recent years. Retained earnings was a positive $1,358 million at May 31, 2023 and has been falling since.
Balance sheet ratios
| Ratio | Formula | 2026 | 2025 |
|---|---|---|---|
| Working capital | Current assets minus current liabilities | 12,056 | 12,796 |
| Current ratio | Current assets / Current liabilities | 1.96 | 2.21 |
| Quick ratio | (Cash + short-term investments + receivables) / Current liabilities | 1.19 | 1.31 |
| Total liabilities to equity | Total liabilities / Shareholders' equity | 1.58 | 1.77 |
| Borrowings to equity | (Current + long-term debt) / Shareholders' equity | 0.53 | 0.60 |
The current ratio fell from 2.21 to 1.96, mainly because of the reclassified debt. Cash and short-term investments of $9,027 million are higher than total borrowings of $7,942 million, so on a net basis Nike holds about $1,085 million more cash than debt. (Definitions of these ratios vary a little between textbooks and analysts, so always state the one you use.)
How to Read the Nike Cash Flow Statement
This is where profit meets reality. The cash flow statement starts with net income and adjusts it to actual cash, then shows where the cash went. From page 58, in millions:
| Year ended May 31, | 2026 | 2025 | 2024 |
|---|---|---|---|
| Net income | 3,108 | 3,219 | 5,700 |
| Depreciation and amortization | 747 | 775 | 796 |
| Deferred income taxes | (96) | (288) | (497) |
| Stock-based compensation | 715 | 709 | 804 |
| Impairment and other | 50 | 33 | 48 |
| Net foreign currency adjustments | 22 | 37 | (138) |
| (Increase) decrease in accounts receivable | (1,207) | (257) | (329) |
| (Increase) decrease in inventories | (31) | 120 | 908 |
| Prepaid, lease right-of-use and other assets | 519 | (224) | (260) |
| Accounts payable, accrued and other liabilities | (959) | (426) | 397 |
| Cash provided by operations | 2,868 | 3,698 | 7,429 |
| Short-term investments, net (purchases, maturities, sales) | 261 | 147 | 1,721 |
| Additions to property, plant and equipment | (684) | (430) | (812) |
| Other investing activities | (65) | 8 | (15) |
| Cash provided (used) by investing | (488) | (275) | 894 |
| Repayment of borrowings | 0 | (1,000) | 0 |
| Proceeds from stock options and other issuances | 354 | 551 | 667 |
| Repurchase of common stock | (146) | (2,985) | (4,250) |
| Dividends (common and preferred) | (2,407) | (2,300) | (2,169) |
| Other financing activities | (93) | (86) | (136) |
| Cash used by financing | (2,292) | (5,820) | (5,888) |
| Effect of exchange rate changes | 11 | 1 | (16) |
| Net increase (decrease) in cash | 99 | (2,396) | 2,419 |
| Cash at beginning of year | 7,464 | 9,860 | 7,441 |
| Cash at end of year | 7,563 | 7,464 | 9,860 |
The short-term investments line adds three lines from the 10-K (purchases, maturities, and sales) into one to save space.
Operating activities: profit is not the same as cash
Nike made $3,108 million of net income but generated only $2,868 million of operating cash. Here is the bridge. Non-cash items added back came to $1,438 million (depreciation of $747 million and stock-based compensation of $715 million are the big ones). But changes in working capital took away $1,678 million. The biggest culprits: receivables absorbed $1,207 million, and payables and accrued liabilities used $959 million, partly offset by a $519 million inflow from prepaid and other assets. Operating cash divided by net income is 0.92 this year, compared with 1.15 and 1.30 in the two earlier years. Anything below 1.0 is a signal to ask where the cash went.
Investing and financing
Nike spent $684 million on property, plant and equipment, which is its capital expenditure. Free cash flow, a measure many analysts use, is operating cash minus capital spending: 2,868 minus 684 equals $2,184 million, down from $3,268 million and $6,617 million in the two earlier years. On the financing side, dividends were $2,407 million, which is more than free cash flow, so Nike funded part of its dividend from its cash pile. Share repurchases fell sharply, from $4,250 million in fiscal 2024 to $2,985 million to just $146 million this year.
The ending cash line
The net increase in cash of $99 million takes beginning cash of $7,464 million to $7,563 million, which is exactly the cash on the balance sheet. That match is the first of several tie-outs.
The Equity Statement and Comprehensive Income
These two statements are shorter but they close the loop. The statement of comprehensive income starts with net income of $3,108 million and adds other comprehensive income of $117 million (mainly a $123 million gain from foreign currency translation and a $6 million loss on cash flow hedges) to reach total comprehensive income of $3,225 million.
The statement of shareholders' equity shows how equity moved from $13,213 million to $14,865 million:
| Item | Amount |
|---|---|
| Balance at May 31, 2025 | 13,213 |
| Net income | 3,108 |
| Other comprehensive income | 117 |
| Stock-based compensation | 715 |
| Stock options exercised | 155 |
| Issuance of shares to employees, net | 110 |
| Repurchase of Class B common stock | (123) |
| Dividends declared | (2,430) |
| Balance at May 31, 2026 | 14,865 |
How the Five Statements Tie Together
This is the part that separates reading from really understanding. The statements share numbers, and when they do not match, something is off:
| Check | Where it appears | Nike (millions) |
|---|---|---|
| Net income | Income statement = first line of cash flow = equity statement | 3,108 |
| Ending cash | Cash flow statement = balance sheet cash | 7,563 |
| Balance sheet balances | Total assets = liabilities + equity | 38,410 = 23,545 + 14,865 |
| Retained earnings roll | (727) + 3,108 net income - 2,430 dividends - 106 repurchases = (155) | (155) |
| Total equity roll | Equity statement ends at balance sheet equity | 14,865 |
| Operating cash flow | Net income + non-cash items + working capital changes | 3,108 + 1,438 - 1,678 = 2,868 |
| Dividends | Declared 2,430 (equity) vs paid 2,407 (cash flow) | Close; the gap relates to dividends declared but unpaid |
Ratios and Metrics Analysts Calculate From These Tables
Once you can read the tables, a few ratios turn them into answers. All calculations below use Nike's reported figures. They are my calculations, not figures reported by Nike, and I use year-end balances for the day-based ratios.
| Metric | Formula | FY2026 | FY2025 |
|---|---|---|---|
| Gross profit margin | Gross profit / Revenue | 42.9% | 42.7% |
| Net profit margin | Net income / Revenue | 6.7% | 7.0% |
| Days sales outstanding (DSO) | Receivables / Revenue x 365 | 46.7 days | 37.2 days |
| Days inventory outstanding (DIO) | Inventory / Cost of sales x 365 | 103.4 days | 103.1 days |
| Days payables outstanding (DPO) | Payables / Cost of sales x 365 | 49.6 days | 47.9 days |
| Cash conversion cycle | DSO + DIO - DPO | 100.4 days | 92.4 days |
| Free cash flow | Operating cash flow - capital expenditure | 2,184 | 3,268 |
| Cash flow to net income | Operating cash flow / Net income | 0.92 | 1.15 |
| Return on equity | Net income / Average equity | 22.1% | 23.3% |
What they say: Nike's cash conversion cycle lengthened by about eight days, almost entirely because receivables grew (DSO rose from 37.2 to 46.7 days). If you take out the $684 million tariff recovery receivable, DSO would be about 41 days, so roughly half of the jump is explained by that one item. Inventory days stayed around 103, meaning Nike takes about 103 days to sell what it holds.
The DuPont view of return on equity breaks 22.1% into three parts: net margin 6.7% x asset turnover 1.24 (revenue divided by average assets) x equity multiplier 2.67 (average assets divided by average equity). It shows that Nike's return comes from using assets and some leverage, not from fat margins. Nike also reports return on invested capital of 18.7% in its 10-K, but that is a non-GAAP measure that the company defines itself, so do not compare it with another company's number unless you know both definitions.
Read Beyond the Table: Notes and MD&A
The five statements are the summary. The detail sits in the notes. For Nike, these are the ones I would open first:
- Note 1, Summary of Significant Accounting Policies: inventory valuation (average or specific identification, inventory reserve of $213 million versus $233 million a year ago), depreciation periods, and revenue recognition.
- Note 6, Long-Term Debt: every bond, its interest rate (between 2.38% and 3.88%), and its maturity date. This is where the $2,000 million current portion comes from.
- Income taxes note: why the effective tax rate moved from 17.1% to 20.3%.
- Severance and restructuring note: Nike recognized $385 million of employee severance costs in fiscal 2026.
- MD&A (Item 7): the narrative on revenue by brand and region, gross margin drivers, and the tariff recovery.
If You Are a Student: Try These Questions
Close the tables above and answer these from Nike's statements. The answers are in the next column.
| Question | Answer |
|---|---|
| What is Nike's gross profit margin for fiscal 2026? | 19,911 / 46,398 = 42.9% |
| Does the income statement show a net income or a net loss for the year, and how much? | Net income of $3,108 million |
| What does (155) next to retained earnings mean? | A retained deficit, not a loss for the year. Total equity is still positive |
| Why is the current portion of long-term debt $2,000 million this year? | Two $1,000 million notes mature within 12 months of the balance sheet date |
| Did Nike generate more or less cash from operations than net income? | Less: $2,868 million versus $3,108 million |
If You Own a Business: What to Borrow From This
- Track three numbers monthly: days sales outstanding, days inventory, and days payable. If you sell on credit and your customers take longer to pay, your cash gets stuck, even when you are profitable.
- Compare profit and cash every period. Nike's profit was $3,108 million, but its operating cash was lower. If yours is lower too, find out why.
- Watch the debt maturity dates. Debt due within 12 months becomes a current liability and can change your current ratio overnight.
- Do the tie-outs on your own books. Net income should flow into equity, and ending cash should match your bank. For help with the mechanics, see my guide on AI bookkeeping automation for small accounting firms.
If You Are an Accountant or Analyst: Review Points
- Receivables growing faster than revenue. Receivables up about 26% against revenue up 0.2% is the kind of movement an analytical review would query. Here it is explained by a $684 million tariff recovery receivable and higher wholesale sales, and the 10-K says substantially all of the remaining balance was received after year end. Always ask for the explanation, and then test it.
- Unusual items in cost of sales. A $986 million benefit in cost of sales is large relative to the $3,797 million calculated operating profit. Check whether it is separately disclosed and how it affects margin comparisons.
- Classification. Confirm that debt maturing within 12 months is current, as Nike did with $2,000 million. Misclassification changes covenant and liquidity ratios.
- Effective tax rate swing. Compare 20.3% with 17.1% and 14.9%, and look for the disclosed reason in the tax note.
- Distributions versus free cash flow. Dividends of $2,407 million exceeded free cash flow of $2,184 million. This is sustainable only while cash and investments last.
- Non-GAAP measures. Treat ROIC and similar metrics as company-defined, and reconcile them to GAAP figures.
How to Read Any 10-K With Claude for Free
You do not need to read a 100-page annual report line by line. Claude, the AI assistant from Anthropic, can find the statements, rebuild the tables, and calculate ratios if you give it the filing. Anthropic's help center says you can upload PDF documents to Claude, with up to 20 files per chat. Claude has a free plan, but free plans have usage limits that can change, so if a long report runs into the limit, upload only the pages with the statements and notes you need.
Step by step
- Get the filing. Go to SEC EDGAR (free) or the company's investor relations page, search the company name, and filter for Form 10-K (annual) or Form 10-Q (quarterly). Open the latest one and save or print it as a PDF.
- Open Claude at claude.ai and sign in with a free account.
- Upload the PDF using "Add files or photos" or by dragging it into the chat.
- Paste one of the prompts below. Ask for one task at a time, and ask Claude to give page numbers so you can verify.
- Check the answers. Open the 10-K at the cited page and confirm at least three numbers yourself.
Prompts you can copy
1. Find the statements:
This is a Form 10-K. Find the five primary financial statements:
income statement, statement of comprehensive income, balance
sheet, cash flow statement and statement of shareholders' equity.
For each one, give me the page number, the period covered and the
unit scale (dollars, thousands or millions). Do not summarize yet.2. Rebuild a table:
Rebuild the income statement as a table with all years shown.
Keep the line items exactly as written and show negative numbers
in parentheses. Then check that every subtotal adds up and tell
me if anything does not.3. Calculate ratios:
Using only the numbers in these statements, calculate gross
margin, net margin, current ratio, quick ratio, total
liabilities to equity, DSO, DIO, DPO, cash conversion cycle, free
cash flow and operating cash flow to net income for the latest
two years. Show the formula and the numbers used for each one.4. Check the tie-outs:
Check that net income agrees across the income statement, cash
flow statement and equity statement, that ending cash on the cash
flow statement equals balance sheet cash, and that total assets
equal liabilities plus equity. List any differences.5. Read the notes:
From the notes, summarize the debt maturities, the lease
liabilities, the inventory valuation method and the reason for
any change in the effective tax rate. Give the page number for
each answer.6. Look for red flags:
Compare the latest two years and flag anything unusual, such as
receivables growing faster than revenue, profit rising while
operating cash flow falls, large one-off items, or debt moving
between current and non-current. For each flag, tell me where in
the filing the company explains it.7. Explain it simply:
Explain this company's income statement, balance sheet and cash
flow statement as if I am a first-year accounting student. Use
three short paragraphs and the real numbers.Always verify. AI can misread a column, mix up years, or make an arithmetic mistake. Treat Claude like a fast junior assistant: great for finding and calculating, but you check the key numbers against the filing. Do not upload confidential client data to any AI tool without permission, and check the privacy settings of the tool you use. For more on how accountants use AI day to day, see my guide on AI bookkeeping automation.
Common Mistakes When Reading Financial Statement Tables
- Ignoring the unit scale. Millions versus thousands changes everything.
- Treating parentheses the same everywhere. Read the label: "Interest (income) expense, net" with (50) is income, not expense.
- Mixing profit and cash. Nike's net income and operating cash flow differ by hundreds of millions.
- Looking at one year only. Nike's flat revenue hides a 43.5% fall in net income the year before.
- Misreading a negative retained earnings balance. A retained deficit with positive total equity is not a loss.
- Skipping the notes and MD&A. The $986 million tariff benefit and the debt maturities are not visible in the main tables.
- Comparing companies with different year-ends or definitions. Nike's year ends May 31, and ratios differ by definition.
Frequently Asked Questions
How to read a financial statement table?
Check the statement type and period, read the unit scale, look at the column years, read the rows down to each subtotal and total, then compare the years and check that the statements tie together.
What is Nike's fiscal year?
Nike's fiscal year ends on May 31. Fiscal 2026 covers June 1, 2025 to May 31, 2026.
What were Nike's revenue and net income in fiscal 2026?
Nike reported revenues of $46,398 million and net income of $3,108 million for fiscal 2026. Revenue was up 0.2% and net income was down 3.4% compared with fiscal 2025.
Does Nike report SG&A?
Nike reports total selling and administrative expense of $16,114 million, made up of demand creation expense of $4,754 million and operating overhead expense of $11,360 million. This is the same idea as SG&A.
Why does Nike have negative retained earnings?
Nike shows a retained deficit of $155 million because dividends and share repurchases charged to retained earnings have exceeded net income in recent years. Total shareholders' equity is still positive at $14,865 million.
What is the difference between a 10-K and a 10-Q?
A 10-K is the annual report with audited financial statements. A 10-Q is the quarterly report covering three months, and its financials are usually unaudited.
Where can I find Nike's 10-K?
You can download Nike's Form 10-K from the SEC's free EDGAR database or from the investor relations section of Nike's website.
Can I use Claude to read a financial statement table?
Yes. You can upload a 10-K PDF to Claude and ask it to find the statements, rebuild the tables, and calculate ratios. Free plans have usage limits that can change, and you should verify the numbers against the filing.
Once you have the five checks down, any filing gets easier. Pick a company you know, download its latest 10-K, and read just the three main tables using these steps. For more plain-English accounting guides, visit the Clarity With AI homepage or learn more about the author.
Sources and References
- NIKE, Inc., Annual Report on Form 10-K for the fiscal year ended May 31, 2026, filed with the U.S. Securities and Exchange Commission. All Nike figures in this guide come from this filing (income statement p. 55, balance sheet p. 57, cash flows p. 58, shareholders' equity p. 59, plus the notes and MD&A).
- U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements.
- U.S. Securities and Exchange Commission, EDGAR company search.
- Anthropic, Upload files to Claude (supported file types and limits).
Disclaimer: This guide is for education only and is not investment, tax, or accounting advice. Nike is used as a public example, and I have no affiliation with the company. Ratios are my own calculations from the figures in the 10-K, and definitions vary. Check the filing and speak with a qualified professional before relying on any number. You can read my full disclaimer here.
