Oracle Corporation (ORCL)

Cash ratio

		May 31, 2025	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021
Cash and cash equivalents	US$ in thousands	10,786,000	10,454,000	9,765,000	21,383,000	30,098,000
Short-term investments	US$ in thousands	417,000	207,000	422,000	519,000	16,456,000
Total current liabilities	US$ in thousands	32,643,000	31,544,000	23,090,000	19,511,000	24,164,000
Cash ratio		0.34	0.34	0.44	1.12	1.93

May 31, 2025 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($10,786,000K + $417,000K) ÷ $32,643,000K
= 0.34

The cash ratio of Oracle Corporation has exhibited a pronounced declining trend over the analyzed period from May 31, 2021, to May 31, 2025. Specifically, the cash ratio stood at 1.93 in 2021, indicating that the company's cash and cash equivalents were nearly twice its current liabilities, reflecting a strong liquidity position. By 2022, the ratio decreased significantly to 1.12, demonstrating a reduction in cash reserves relative to current liabilities but still maintaining a comfortable liquidity cushion.

Subsequently, the ratio experienced a notable decline to 0.44 in 2023, falling below the 1.0 threshold, which suggests that cash and cash equivalents covered less than half of the company's current liabilities. This downward movement continued into the following years, with the ratio decreasing further to 0.34 in both 2024 and 2025. Such levels imply that Oracle's cash reserves are relatively lower in comparison to its short-term obligations, indicating a tightening of liquidity position over time.

Overall, the steady decrease in Oracle’s cash ratio over this period indicates a shift towards reduced reliance on cash and cash equivalents for covering current liabilities. This trend may reflect strategic changes in liquidity management, an increased utilization of other current assets, or a change in operational cash flows. Nonetheless, the declining cash ratio warrants attention as it suggests a diminished buffer of readily available cash to meet short-term liabilities, potentially impacting the company's short-term financial flexibility in the future.