Oracle Corporation (ORCL)

Cash conversion cycle

		May 31, 2025	Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	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
Days of inventory on hand (DOH)	days	—	—	—	—	7.67	—	—	—	8.02	—	—	—	12.91	—	—	—	6.60	—	—	—
Days of sales outstanding (DSO)	days	54.42	52.68	54.33	54.40	54.27	50.72	48.10	46.69	50.53	47.29	49.09	49.07	51.20	40.04	39.34	40.06	48.77	42.64	40.97	42.59
Number of days of payables	days	110.26	52.48	59.17	49.78	54.16	40.48	27.83	26.70	32.40	48.05	54.61	54.36	54.16	47.69	45.48	33.84	34.61	38.48	34.09	24.79
Cash conversion cycle	days	-55.84	0.20	-4.84	4.62	7.78	10.24	20.27	19.99	26.15	-0.76	-5.51	-5.29	9.95	-7.66	-6.14	6.22	20.76	4.17	6.88	17.80

May 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 54.42 – 110.26
= -55.84

The analysis of Oracle Corporation's cash conversion cycle (CCC) over the specified period reveals significant fluctuations indicative of changes in operational efficiency and working capital management.

Initially, the CCC was relatively high at approximately 17.80 days as of August 31, 2020, indicating a moderate period between cash outflows for inventory and receivables and cash inflows from customers. The cycle then experienced a notable reduction, reaching a low of around 4.17 days by February 28, 2021, reflecting improved efficiency in managing receivables and payables, possibly due to optimized credit terms and collection processes.

During the subsequent quarters, the CCC fluctuated, with brief increases—such as around 20.76 days on May 31, 2021—and short-lived negative periods, such as -6.14 days on November 30, 2021, and -7.66 days as of February 28, 2022. Negative CCC values suggest that Oracle was receiving cash from customers before settling its payables, indicating favorable working capital management. This trend persisted with negative values through much of 2022, exemplified by -5.29 days in August 2022 and -5.51 days in November 2022.

However, by May 31, 2023, the CCC notably increased to approximately 26.15 days, implying longer durations in the cash conversion process, possibly due to extended receivables collection periods or delays in cash inflows. Yet, in subsequent periods, the CCC decreased again, reaching around 4.62 days on August 31, 2024. The period starting from late 2024 shows a significant shift, with the cycle turning negative again, reaching -55.84 days as of May 31, 2025. This highly negative value indicates that the company is collecting cash from customers well before disbursing payments to suppliers, a sign of highly efficient working capital management.

In summary, Oracle's cash conversion cycle has demonstrated considerable variability over the analyzed timeframe, oscillating between positive and negative values. The periods of negative CCC are noted for enhanced operational efficiency and strong receivables collection relative to payables, whereas the positive periods suggest shorter or less favorable liquidity timing. The recent trend towards highly negative values underscores an ongoing pattern of effective cash flow management, although the extreme magnitude warrants monitoring for potential operational or strategic shifts.