Oracle Corporation (ORCL)
Solvency ratios
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | — | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | — | 0.00 |
| Financial leverage ratio | 8.03 | 16.20 | 86.37 | — | 22.03 |
The debt-to-assets ratio for Oracle Corporation remains at 0.00 across all examined periods from May 31, 2021, to May 31, 2025, indicating an absence of reported debt relative to total assets during this timeframe. Similarly, the debt-to-capital ratio and debt-to-equity ratio are consistently reported as 0.00, suggesting that the company does not utilize debt financing or leverage in its capital structure during these periods.
In contrast, the financial leverage ratio exhibits variability over the same period. It began at 22.03 on May 31, 2021, then is marked as unavailable or not reported for May 31, 2022. By May 31, 2023, there is a significant increase to 86.37, indicating a period when leverage was notably higher, possibly due to a shift in capital structure or accounting treatments. Subsequently, the ratio decreases to 16.20 on May 31, 2024, and further to 8.03 by May 31, 2025, reflecting a substantial reduction in financial leverage over this period.
Overall, the data indicates that Oracle Corporation maintains a highly conservative or debt-free capital structure throughout the analyzed periods, with minimal to no reliance on debt financing. The fluctuations in the financial leverage ratio may originate from internal rebalancing, changes in asset base, or accounting adjustments rather than actual increases in debt obligations. This consistent pattern underscores a robust solvency profile characterized by negligible leverage and a strong ability to meet its obligations without dependence on external debt.
Coverage ratios
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 0.00 | 4.39 | 3.65 | 5.75 | 6.27 |
The interest coverage ratio for Oracle Corporation demonstrates fluctuations over the examined period from May 31, 2021, to May 31, 2025. Specifically, as of May 31, 2021, the ratio stood at 6.27, indicating that the company's earnings before interest and taxes (EBIT) were more than six times its interest expenses, reflecting a comfortable capacity to service its interest obligations. By May 31, 2022, the ratio declined to 5.75, signaling a modest reduction in coverage but remaining within a relatively healthy range.
However, a more notable decrease is observed by May 31, 2023, when the ratio fell to 3.65. This decline suggests the company faced increased interest expenses or a reduction in EBIT, thereby tightening its ability to meet interest payments through earnings. The downward trend continues into May 31, 2024, with the ratio improving somewhat to 4.39, yet still indicating less coverage compared to prior years.
Most significantly, by May 31, 2025, the interest coverage ratio drops to zero, implying that the company either reported no EBIT or interest expenses, or both, thus indicating an inability to cover interest obligations solely through operating earnings. This situation raises concerns regarding Oracle's financial stability and its ability to sustain its debt servicing capacity in that particular fiscal period.
In summary, the trend indicates a gradual decline in Oracle’s interest coverage ratio over the years, with a sharp deterioration towards the most recent fiscal year, suggesting increased financial risk associated with its debt servicing capacity.