Oracle Corporation (ORCL)
Solvency ratios
| 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 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.54 | 0.60 | 0.61 | 0.62 | 0.64 | 0.66 | 0.63 | 0.58 | 0.66 | 0.66 | 0.69 | 0.62 | 0.58 | 0.54 | 0.58 | 0.60 | 0.60 | 0.51 | 0.51 | 0.48 |
| Debt-to-capital ratio | 0.90 | 0.94 | 0.96 | 0.97 | 0.99 | 1.03 | 1.06 | 1.08 | 1.09 | 1.14 | 1.16 | 1.02 | 0.94 | 0.88 | 0.89 | 0.88 | 0.85 | 0.78 | 0.77 | 0.73 |
| Debt-to-equity ratio | 8.76 | 14.67 | 21.33 | 35.63 | 80.54 | — | — | — | — | — | — | — | 14.51 | 7.14 | 8.02 | 7.14 | 5.73 | 3.46 | 3.26 | 2.75 |
| Financial leverage ratio | 16.20 | 24.38 | 34.74 | 57.66 | 125.24 | — | — | — | — | — | — | — | 25.03 | 13.27 | 13.90 | 11.96 | 9.56 | 6.79 | 6.33 | 5.76 |
Oracle Corporation's solvency ratios indicate its ability to meet its long-term financial obligations. The debt-to-assets ratio has been consistently high, ranging from 0.54 to 0.69 over the past few years, suggesting that a significant portion of the company's assets are funded by debt.
The debt-to-capital ratio has also been on an upward trend, reaching levels between 0.90 to 1.16, indicating a higher dependency on debt to finance its operations and investments.
The debt-to-equity ratio shows a significant increase in leverage over time, with levels ranging from 3.26 to 80.54. This suggests that Oracle has been increasingly relying on debt to fund its operations and growth, which could potentially pose risks to the company's financial stability.
The financial leverage ratio has been consistently high, exceeding 6 in most periods and reaching as high as 125.24, indicating that Oracle has a high level of financial leverage which can magnify both returns and risks for shareholders.
Overall, Oracle Corporation's solvency ratios reflect a high level of debt financing and financial leverage, which may require close monitoring to ensure sustainable financial health in the long term.
Coverage ratios
| 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 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 4.34 | 4.08 | 3.88 | 3.74 | 3.60 | 3.96 | 4.41 | 3.33 | 3.78 | 3.98 | 4.23 | 6.06 | 6.21 | 6.27 | 6.49 | 6.76 | 7.05 | 7.31 | 7.14 | 6.96 |
Oracle Corporation's interest coverage ratio has fluctuated over the past few years, ranging from a low of 3.33 in August 2022 to a high of 7.31 in August 2019. The interest coverage ratio indicates the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
A higher interest coverage ratio typically suggests that the company is in a stronger financial position, as it has more earnings available to cover its interest expenses. Oracle's interest coverage ratio has generally been above 3, which is considered the minimum acceptable level for most investors and creditors.
The trend from November 2019 to February 2021 shows a consistent increase in the interest coverage ratio, reaching a peak of 7.31 in August 2019. This could indicate improving profitability and earnings stability during that period.
However, from August 2021 to August 2022, there was a decline in the interest coverage ratio, with a low of 3.33 in August 2022. This may raise concerns about the company's ability to cover its interest payments with its earnings during this period.
Overall, while Oracle Corporation's interest coverage ratio has shown some variability, it has generally remained above the minimum acceptable level, indicating that the company has the ability to meet its interest obligations with its earnings.