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Analysis of Property, Plant and Equipment
Advanced level
Property, Plant and Equipment Disclosure
Oracle Corp., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (filing date: 2020-06-22), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25).
| Item | Description | The company |
|---|---|---|
| Property, plant and equipment, gross | Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Oracle Corp.’s property, plant and equipment, gross increased from 2018 to 2019 and from 2019 to 2020. |
| Property, plant and equipment, net | Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. | Oracle Corp.’s property, plant and equipment, net increased from 2018 to 2019 but then slightly decreased from 2019 to 2020. |
Asset Age Ratios (Summary)
Oracle Corp., asset age ratios
Based on: 10-K (filing date: 2020-06-22), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25).
| Asset age ratio | Description | The company |
|---|---|---|
| Average age ratio | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Oracle Corp.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020. |
| Estimated total useful life | Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. | Oracle Corp.’s estimated total useful life of depreciable property, plant and equipment increased from 2018 to 2019 but then decreased significantly from 2019 to 2020. |
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Oracle Corp.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
| Estimated remaining life | Oracle Corp.’s estimated remaining life of depreciable property, plant and equipment increased from 2018 to 2019 but then decreased significantly from 2019 to 2020. |
Average Age
Based on: 10-K (filing date: 2020-06-22), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25).
2020 Calculations
1 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land)
= 100 × ÷ ( – ) =
| Asset age ratio | Description | The company |
|---|---|---|
| Average age | As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company’s fixed asset base is old or new. Newer assets are likely to be more efficient. | Oracle Corp.’s average age ratio of depreciable property, plant and equipment deteriorated from 2018 to 2019 and from 2019 to 2020. |
Estimated Total Useful Life
Based on: 10-K (filing date: 2020-06-22), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25).
2020 Calculations
1 Estimated total useful life = (Property, plant and equipment, gross – Land) ÷ Depreciation expense
= ( – ) ÷ =
| Asset age ratio | Description | The company |
|---|---|---|
| Estimated total useful life | Over longer time periods, this ratio is a useful measure of company’s depreciation policy and can be used for comparisons with competitors. | Oracle Corp.’s estimated total useful life of depreciable property, plant and equipment increased from 2018 to 2019 but then decreased significantly from 2019 to 2020. |
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (filing date: 2020-06-22), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25).
2020 Calculations
1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =
| Asset age ratio | Description | The company |
|---|---|---|
| Estimated time elapsed since purchase | The approximate age in years of a company’s fixed assets. Useful for comparison purposes. | Oracle Corp.’s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020. |
Estimated Remaining Life
Based on: 10-K (filing date: 2020-06-22), 10-K (filing date: 2019-06-21), 10-K (filing date: 2018-06-22), 10-K (filing date: 2017-06-27), 10-K (filing date: 2016-06-22), 10-K (filing date: 2015-06-25).
2020 Calculations
1 Estimated remaining life = (Property, plant and equipment, net – Land) ÷ Depreciation expense
= ( – ) ÷ =
| Asset age ratio | Description | The company |
|---|---|---|
| Estimated remaining life | Oracle Corp.’s estimated remaining life of depreciable property, plant and equipment increased from 2018 to 2019 but then decreased significantly from 2019 to 2020. |