Oracle Corporation (ORCL)
Activity ratios
Short-term
Turnover ratios
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 40.57 | 49.24 | 49.10 | 76.65 | 52.92 |
| Receivables turnover | 6.73 | 7.22 | 7.13 | 7.48 | 6.65 |
| Payables turnover | 5.75 | 12.19 | 11.71 | 14.61 | 17.53 |
| Working capital turnover | — | — | 3.50 | 1.29 | 1.06 |
Inventory turnover for Oracle Corporation has been relatively stable over the past five years, with a high of 76.65 in 2021 and a low of 40.57 in 2024. This indicates that the company is managing its inventory efficiently, turning over its inventory multiple times within a year.
Receivables turnover shows a declining trend, with the ratio decreasing from 7.48 in 2021 to 6.73 in 2024. A lower receivables turnover may suggest that Oracle is taking longer to collect payments from customers, which could impact its cash flow and working capital management.
Payables turnover has also decreased over the years, indicating that Oracle is taking longer to pay its suppliers. The ratio dropping from 17.53 in 2020 to 5.75 in 2024 may imply a potential strain on cash flow management or changes in payment terms with suppliers.
The working capital turnover for Oracle was not provided for 2023 and 2024, but it increased from 1.06 in 2020 to 3.50 in 2022. A higher working capital turnover ratio suggests that Oracle is generating more revenue relative to its working capital, indicating efficient utilization of resources.
Overall, while Oracle has shown efficiency in managing its inventory, the decreasing trends in receivables turnover and payables turnover may require further analysis to understand implications on cash flow and working capital management.
Average number of days
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 9.00 | 7.41 | 7.43 | 4.76 | 6.90 |
| Days of sales outstanding (DSO) | days | 54.27 | 50.53 | 51.20 | 48.77 | 54.90 |
| Number of days of payables | days | 63.49 | 29.95 | 31.18 | 24.98 | 20.82 |
Activity ratios such as Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables provide insights into how efficiently Oracle Corporation manages its inventory, collects receivables, and pays its suppliers.
Based on the data provided:
1. Days of Inventory on Hand (DOH):
- Oracle's DOH has been fluctuating over the years, ranging from 4.76 days in 2021 to 9.00 days in 2024. A lower DOH indicates faster inventory turnover, which is generally favorable as it implies that Oracle is efficiently managing its inventory levels. However, the increase in DOH in 2024 compared to previous years may suggest that Oracle is holding more inventory, potentially tying up more capital.
2. Days of Sales Outstanding (DSO):
- Oracle's DSO has ranged from 48.77 days in 2021 to 54.27 days in 2024. A decrease in DSO indicates that Oracle is collecting receivables more quickly, which is a positive sign of efficient accounts receivable management. However, the increase in DSO in 2024 suggests that it is taking Oracle longer to collect payments from customers, which may lead to cash flow challenges.
3. Number of Days of Payables:
- Oracle's number of days of payables has been increasing over the years, from 20.82 days in 2020 to 63.49 days in 2024. A longer payment period can indicate that Oracle is taking longer to pay its suppliers, potentially benefiting from improved cash flow management. However, excessively extending payables could strain relationships with suppliers in the long run.
Overall, Oracle Corporation's activity ratios show a mix of efficiency and challenges in managing inventory, receivables, and payables. Monitoring these ratios regularly can help assess operational performance and identify areas for improvement in working capital management.
See also:
Oracle Corporation Short-term (Operating) Activity Ratios
Long-term
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.46 | 2.93 | 4.37 | 5.74 | 5.91 |
| Total asset turnover | 0.38 | 0.37 | 0.39 | 0.31 | 0.32 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. Oracle Corporation's fixed asset turnover has been decreasing over the past five years, indicating a decline in the company's ability to generate revenue from its fixed assets. This trend may suggest that Oracle is not effectively utilizing its investment in fixed assets to drive sales.
On the other hand, the total asset turnover ratio reflects how well a company uses all its assets to generate revenue. Oracle's total asset turnover has been relatively stable over the past five years, hovering around 0.37 to 0.39. This suggests that the company has been able to generate a consistent level of revenue relative to its total assets over the period.
Overall, while Oracle's fixed asset turnover has shown a decline, its total asset turnover remains relatively consistent. This may indicate that Oracle is more efficient in utilizing its total assets as a whole compared to its fixed assets specifically. Further analysis and considerations of the company's business strategy and industry dynamics would be needed to draw concrete conclusions about Oracle's long-term operational efficiency.