Oracle Corporation (ORCL)

Payables turnover

		May 31, 2025	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021
Cost of revenue	US$ in thousands	2,307,000	15,143,000	13,564,000	8,877,000	7,855,000
Payables	US$ in thousands	5,113,000	2,357,000	1,204,000	1,317,000	745,000
Payables turnover		0.45	6.42	11.27	6.74	10.54

May 31, 2025 calculation

Payables turnover = Cost of revenue ÷ Payables
= $2,307,000K ÷ $5,113,000K
= 0.45

The payables turnover ratio for Oracle Corporation has exhibited notable fluctuations over the prescribed period from May 31, 2021, to May 31, 2025. In the fiscal year ending May 31, 2021, the ratio stood at 10.54, indicating that Oracle settled its accounts payable approximately 10.54 times throughout the year. This ratio declined significantly in the subsequent year, reaching 6.74 by May 31, 2022, which suggests a slowdown in the rate at which the company paid its suppliers or vendors.

Following this decrease, the payables turnover recovered to a higher level of 11.27 in the fiscal year ending May 31, 2023, surpassing the 2021 figure. This increase may imply a reduction in outstanding payables or a more aggressive payment approach during that period. However, the ratio then sharply declined to 6.42 by May 31, 2024, nearly matching the 2022 figure and indicating a reversal in payables management, with Oracle potentially taking longer to settle its liabilities or experiencing changes in payment terms.

By May 31, 2025, the payables turnover ratio drastically decreased to 0.45. This near-negligible figure signals an extended period in settling its trade payables, possibly reflecting significant liquidity issues, altered credit terms, or strategic delays in payments. The dramatic decline from previous years indicates a shift toward substantially lengthening the accounts payable cycle.

Overall, the observed volatility in Oracle's payables turnover ratio suggests a pattern of fluctuating supplier payment practices. The late-year deterioration particularly highlights potential underlying concerns such as cash flow constraints, negotiated credit terms, or changes in operational strategy that have impacted payables management over time.