Oracle Corporation (ORCL)

Current ratio

		May 31, 2025	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021
Total current assets	US$ in thousands	24,579,000	22,554,000	21,004,000	31,633,000	55,567,000
Total current liabilities	US$ in thousands	32,643,000	31,544,000	23,090,000	19,511,000	24,164,000
Current ratio		0.75	0.72	0.91	1.62	2.30

May 31, 2025 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $24,579,000K ÷ $32,643,000K
= 0.75

The analysis of Oracle Corporation’s current ratio over the period from May 31, 2021, to May 31, 2025, indicates a consistent decline in liquidity. The current ratio was 2.30 in 2021, suggesting that the company had more than twice the current assets relative to its current liabilities at that time, reflecting a robust liquidity position.

By 2022, the ratio decreased to 1.62, which still indicates a comfortable buffer of current assets over current liabilities, though the margin of safety has diminished compared to the previous year. The downward trend continued markedly in 2023, with the ratio falling to 0.91, approaching a precarious position where current assets are nearly equivalent to current liabilities, and raising concerns about the company's short-term liquidity management.

The decline persisted into 2024, with the ratio dropping further to 0.72. This indicates that current liabilities exceed current assets, suggesting potential liquidity constraints or a strategic shift in asset management. The ratio in 2025 shows a slight increase to 0.75, though it remains below the generally acceptable threshold of 1.0.

Overall, the trend highlights a significant reduction in Oracle’s short-term financial cushion over the four-year period. This decline warrants attention, as a current ratio below 1.0 could point to increased liquidity risks, impacting the company's ability to meet its short-term obligations without additional financing or operational adjustments.