Oracle Corporation (ORCL)

Return on total capital

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
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 12,807,000 17,523,000 16,866,000 16,211,000 15,441,000 14,834,000 14,209,000 13,601,000 12,798,000 13,071,000 13,453,000 9,596,000 10,548,000 11,073,000 11,431,000 15,862,000 15,676,000 14,964,000 14,617,000 14,323,000
Long-term debt US$ in thousands
Total stockholders’ equity US$ in thousands 20,969,000 16,730,000 13,746,000 10,816,000 8,704,000 5,623,000 4,378,000 2,841,000 1,556,000 -1,912,000 -3,776,000 -5,449,000 -5,768,000 -8,211,000 -9,658,000 -1,541,000 5,952,000 9,637,000 8,616,000 10,140,000
Return on total capital 61.08% 104.74% 122.70% 149.88% 177.40% 263.81% 324.55% 478.74% 822.49% 263.37% 155.28% 169.65% 141.25%

May 31, 2025 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $12,807,000K ÷ ($—K + $20,969,000K)
= 61.08%

The analysis of Oracle Corporation's return on total capital (ROTC) over the specified periods reveals significant fluctuations, indicating variability in the company's efficiency in generating profits from its capital base.

From the fiscal periods ending August 31, 2020, through May 31, 2021, the ROTC exhibited upward movement, peaking notably at 263.37% on May 31, 2021. During this interval, the company demonstrated strong capital utilization and profitability relative to its total capital employed, suggesting effective management and possibly favorable market conditions or operational efficiencies during that phase.

Data for the subsequent periods until early 2022 are unavailable, marked by placeholders, implying either data omissions or transitional reporting periods, which limits the continuity of the analysis during this time.

Remarkably, on May 31, 2023, the ROTC surged to an exceptional high of 822.49%, marking an extraordinary increase compared to prior periods. This indicates an extraordinary level of profitability and capital efficiency at that time, possibly driven by exceptional operational performance, strategic initiatives, or accounting adjustments.

Following this peak, the ROTC experienced a decline, registering at 478.74% on August 31, 2023, then decreasing further to 324.55% by November 30, 2023. Continued diminishment is observed through subsequent periods, with figures dropping to 263.81% in February 2024 and trending downward thereafter.

Looking forward, projections indicate a steady decline, with the ROTC reaching approximately 61.08% by May 31, 2025. This downward trend suggests a gradual reduction in the company's capital efficiency or profitability relative to total capital, which could be attributable to market saturation, increased competition, operational challenges, or a normalization of prior extraordinary gains.

Overall, the data depict a pattern of pronounced volatility in Oracle's return on total capital, characterized by remarkable peaks and subsequent declines. The recent trend implies a normalization or stabilization phase, although the levels remain significantly higher than typical industry benchmarks, highlighting periods of exceptional performance followed by a gradual decrease toward more sustainable profitability levels.