Oracle Corporation (ORCL)

Quick ratio

		May 31, 2025	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021
Cash	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
Receivables	US$ in thousands	8,558,000	7,874,000	6,915,000	5,953,000	5,409,000
Total current liabilities	US$ in thousands	32,643,000	31,544,000	23,090,000	19,511,000	24,164,000
Quick ratio		0.61	0.59	0.74	1.43	2.15

May 31, 2025 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($10,786,000K + $417,000K + $8,558,000K) ÷ $32,643,000K
= 0.61

The quick ratio of Oracle Corporation has demonstrated a declining trend over the period from May 31, 2021, to May 31, 2025. Specifically, the ratio was 2.15 in 2021, indicating that the company's most liquid assets were more than twice its current liabilities at that time. By May 31, 2022, the quick ratio decreased to 1.43, reflecting a reduction in liquidity but still remaining above 1.0, which generally signifies that the company potentially could cover its short-term obligations without relying on inventory sales.

Subsequently, the ratio continued to decline, reaching 0.74 by May 31, 2023. This indicates a substantial decrease in the company's liquidity position, implying that liquid assets were less than its current liabilities, which could raise concerns about short-term financial flexibility. The downward trend persisted into 2024, with the ratio declining further to 0.59, and stabilized slightly at 0.61 by May 31, 2025. This indicates that, in recent years, Oracle’s liquid assets have not been sufficient to fully cover its current liabilities, suggesting a tightening of liquidity.

Overall, the progressive decline in the quick ratio over this period suggests a diminishing capacity of Oracle to meet its short-term obligations using its most liquid assets. While prior ratios above 1.0 typically denote a comfortable liquidity cushion, the current ratios below that threshold reflect a potential need for careful liquidity management and may warrant further examination of the company's working capital strategies to ensure operational stability.