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.