NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44: 
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|  2 | NIKE, Inc. Consolidated Statements of Income |


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|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
|  2 |                                          | Year Ended May 31, |        |      |        |      |        |        |    |    |        |
|  3 | (In millions, except per share data)     | 2018               |        | 2017 |        | 2016 |        |        |    |    |        |
|  4 | Revenues                                 | $                  | 36,397 |      |        | $    | 34,350 |        |    | $  | 32,376 |
|  5 | Cost of sales                            | 20,441             |        |      | 19,038 |      |        | 17,405 |    |    |        |
|  6 | Gross profit                             | 15,956             |        |      | 15,312 |      |        | 14,971 |    |    |        |
|  7 | Demand creation expense                  | 3,577              |        |      | 3,341  |      |        | 3,278  |    |    |        |
|  8 | Operating overhead expense               | 7,934              |        |      | 7,222  |      |        | 7,191  |    |    |        |
|  9 | Total selling and administrative expense | 11,511             |        |      | 10,563 |      |        | 10,469 |    |    |        |
| 10 | Interest expense (income), net           | 54                 |        |      | 59     |      |        | 19     |    |    |        |
| 11 | Other expense (income), net              | 66                 |        |      | (196   | )    |        | (140   | )  |    |        |
| 12 | Income before income taxes               | 4,325              |        |      | 4,886  |      |        | 4,623  |    |    |        |
| 13 | Income tax expense                       | 2,392              |        |      | 646    |      |        | 863    |    |    |        |
| 14 | NET INCOME                               | $                  | 1,933  |      |        | $    | 4,240  |        |    | $  | 3,760  |
| 16 | Earnings per common share:               |                    |        |      |        |      |        |        |    |    |        |
| 17 | Basic                                    | $                  | 1.19   |      |        | $    | 2.56   |        |    | $  | 2.21   |
| 18 | Diluted                                  | $                  | 1.17   |      |        | $    | 2.51   |        |    | $  | 2.16   |
| 20 | Dividends declared per common share      | $                  | 0.78   |      |        | $    | 0.70   |        |    | $  | 0.62   |

The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.

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Question: How has Nike's dividend payout ratio changed from 2017 to 2018, and what does it reflect about its dividend policy?
Answer: Based on Nike's 2018 financial statements:

2018 Dividend Payout Ratio:

Dividend per Share (2018): $0.78
Earnings per Share (EPS, 2018): $1.17
Payout Ratio (2018): ($0.78 / $1.17) × 100 ≈ 66.67%
2017 Dividend Payout Ratio:

Dividend per Share (2017): $0.70
Earnings per Share (EPS, 2017): $2.51
Payout Ratio (2017): ($0.70 / $2.51) × 100 ≈ 27.89%
Comparison and Interpretation:
Nike’s dividend payout ratio increased significantly from 27.89% in 2017 to 66.67% in 2018. This substantial rise reflects a strategic shift to distribute a larger portion of earnings to shareholders, despite the decline in net income in 2018. This increase highlights Nike's commitment to returning value to shareholders while maintaining financial flexibility