Oracle Corporation (ORCL)
Solvency ratios
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.54 | 0.64 | 0.66 | 0.58 | 0.60 |
| Debt-to-capital ratio | 0.90 | 0.99 | 1.09 | 0.94 | 0.85 |
| Debt-to-equity ratio | 8.76 | 80.54 | — | 14.51 | 5.73 |
| Financial leverage ratio | 16.20 | 125.24 | — | 25.03 | 9.56 |
Oracle Corporation's solvency ratios indicate its ability to meet its long-term financial obligations and the extent to which the company is reliant on debt to finance its operations.
The debt-to-assets ratio has shown a decreasing trend over the past five years, decreasing from 0.60 in 2020 to 0.54 in 2024. This suggests that Oracle has been able to reduce its reliance on debt to finance its assets, which is a positive sign for the company's financial health.
The debt-to-capital ratio has fluctuated over the years but has generally decreased from 0.85 in 2020 to 0.90 in 2024. This ratio indicates the proportion of a company's capital that is financed through debt and suggests that Oracle's capital structure has become slightly less leveraged over time.
The debt-to-equity ratio has shown significant fluctuations, ranging from 5.73 in 2020 to 80.54 in 2023. In 2024, this ratio decreased to 8.76, indicating that Oracle is relying less on debt relative to equity to finance its operations. However, the high ratios in previous years may indicate higher financial risk and leverage.
The financial leverage ratio has also varied significantly, with a peak of 125.24 in 2023. This ratio measures the extent to which a company is using debt to finance its assets and suggests that Oracle has managed to reduce its financial leverage over time.
Overall, the decreasing trends in the debt-to-assets, debt-to-capital, and debt-to-equity ratios, along with the fluctuations in the financial leverage ratio, indicate that Oracle Corporation has been making efforts to improve its financial health and reduce its reliance on debt financing.
Coverage ratios
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 4.34 | 3.60 | 3.78 | 6.21 | 7.05 |
The interest coverage ratio for Oracle Corporation has shown fluctuations over the past five years. The ratio indicates the company's ability to cover its interest expenses with its operating income.
In May 2020, the interest coverage ratio was 7.05, indicating that Oracle had more than enough operating income to cover its interest expenses. However, there has been a declining trend in the following years. In May 2021, the ratio decreased to 6.21, and further dropped to 3.78 in May 2022, reflecting a potential strain on Oracle's ability to cover its interest payments.
The ratio improved slightly in May 2023 to 3.60 but is still lower than previous years. The most recent data from May 2024 shows a further improvement to 4.34, but it remains below the levels seen in 2020. This suggests that Oracle's ability to cover its interest expenses has improved compared to the previous year but is still lower than in the past.
Overall, Oracle Corporation's interest coverage ratio has exhibited volatility, indicating potential fluctuations in its ability to cover interest payments with operating income. Continued monitoring and analysis of this ratio will be important to assess the company's financial health and its ability to meet its debt obligations.