Oracle Corporation (ORCL)
Cash conversion cycle
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | 50.80 | 48.20 | 46.78 | 50.53 | 29.91 | 30.48 | 29.90 | 30.66 | 24.30 | 23.75 | 24.01 | 29.10 | 25.48 | 24.37 | 25.23 | 30.62 | 22.81 | 22.26 | 21.03 |
| Number of days of payables | days | 63.50 | 43.74 | 28.91 | 26.37 | 29.95 | 42.25 | 46.20 | 32.13 | 31.18 | 26.83 | 24.66 | 25.52 | 24.98 | 27.65 | 24.35 | 17.68 | 20.82 | 16.57 | 16.59 | 14.93 |
| Cash conversion cycle | days | -0.23 | 7.06 | 19.29 | 20.41 | 27.99 | -12.34 | -15.72 | -2.23 | 6.91 | -2.53 | -0.91 | -1.51 | 8.88 | -2.18 | 0.01 | 7.55 | 16.70 | 6.23 | 5.67 | 6.10 |
May 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 9.00 + 54.27 – 63.50
= -0.23
The cash conversion cycle of Oracle Corporation has exhibited fluctuations over the past few quarters. In the most recent period ending May 31, 2024, the company's cash conversion cycle was -0.23 days, indicating a negative cycle, which suggests that Oracle has been able to generate cash from its operating activities quickly. This may be attributed to efficient working capital management, effective inventory turnover, and prompt receivables collection.
In previous quarters, the cash conversion cycle has shown positive values, indicating that Oracle took longer to convert its investments in inventory and accounts receivable into cash. For example, in the quarter ending Feb 29, 2024, the cycle was 7.06 days, showing a longer period compared to the most recent quarter. This increase could be due to various factors, such as extended payment terms with suppliers or slower collection of receivables.
Looking back further, the company experienced a significant improvement in its cash conversion cycle in the quarter ending Feb 28, 2023, with a cycle of -12.34 days. This negative cycle suggests that Oracle was operating efficiently in terms of managing its cash flows, possibly through effective inventory management and timely collections.
Overall, Oracle's cash conversion cycle has shown variability, with both positive and negative cycles observed in recent quarters. It is essential for the company to continue monitoring and managing its working capital effectively to ensure consistent and optimal cash conversion cycles in the future.
Peer comparison
May 31, 2024