Stock Analysis on Net

Oracle Corp. (NYSE:ORCL)

Financial Reporting Quality: Aggregate Accruals 

Microsoft Excel LibreOffice Calc

Balance-Sheet-Based Accruals Ratio

Oracle Corp., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Operating Assets
Total assets 131,107  115,438  108,709  137,264  134,991  112,180 
Less: Cash and cash equivalents 30,098  37,239  20,514  21,620  21,784  20,152 
Less: Marketable securities 16,456  5,818  17,313  45,641  44,294  35,973 
Operating assets 84,553  72,381  70,882  70,003  68,913  56,055 
Operating Liabilities
Total liabilities 125,155  102,721  86,346  91,040  80,745  64,390 
Less: Notes payable, current 8,250  2,371  4,494  4,491  9,797  3,750 
Less: Notes payable and other borrowings, non-current 75,995  69,226  51,673  56,128  48,112  40,105 
Operating liabilities 40,910  31,124  30,179  30,421  22,836  20,535 
 
Net operating assets1 43,643  41,257  40,703  39,582  46,077  35,520 
Balance-sheet-based aggregate accruals2 2,386  554  1,121  (6,495) 10,557  — 
Financial Ratio
Balance-sheet-based accruals ratio3 5.62% 1.35% 2.79% -15.16% 25.88%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Accenture PLC 27.93% 3.73% 42.14% 1.41% 51.55%
Adobe Inc. 14.14% 8.20% 2.25% 77.63% -0.97%
Automatic Data Processing Inc.
Fidelity National Information Services Inc. -2.83% -2.08% 115.03% -3.10%
International Business Machines Corp. -7.39% -9.64% 38.84% -2.32%
Intuit Inc. 139.73% -1.39% 29.27% 1.03% -1.49%
Mastercard Inc. 53.84% 25.41% 91.82% 13.74%
Microsoft Corp. 40.52% 14.41% 46.31% 4.67% 72.10%
PayPal Holdings Inc.
salesforce.com inc. 10.87% 65.87% 71.99% -11.13%
ServiceNow Inc. 34.89% 19.95% 121.81% 234.32%
Visa Inc. -1.58% 2.71% 1.03% 1.56% -6.20%
Balance-Sheet-Based Accruals Ratio, Sector
Software & Services 12.32% 5.29% 49.25% -3.23% 200.00%
Balance-Sheet-Based Accruals Ratio, Industry
Information Technology 19.17% 2.17% 13.41% -3.21% 200.00%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

1 2021 Calculation
Net operating assets = Operating assets – Operating liabilities
= 84,55340,910 = 43,643

2 2021 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2021 – Net operating assets2020
= 43,64341,257 = 2,386

3 2021 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 2,386 ÷ [(43,643 + 41,257) ÷ 2] = 5.62%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Oracle Corp. deteriorated earnings quality from 2020 to 2021.

Cash-Flow-Statement-Based Accruals Ratio

Oracle Corp., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Net income 13,746  10,135  11,083  3,825  9,335  8,901 
Less: Net cash provided by operating activities 15,887  13,139  14,551  15,386  14,126  13,561 
Less: Net cash (used for) provided by investing activities (13,098) 9,843  26,557  (5,625) (21,494) (5,154)
Cash-flow-statement-based aggregate accruals 10,957  (12,847) (30,025) (5,936) 16,703  494 
Financial Ratio
Cash-flow-statement-based accruals ratio1 25.81% -31.35% -74.80% -13.86% 40.94%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Accenture PLC 11.80% -13.65% -1.28% -12.70% 15.84%
Adobe Inc. 9.21% -0.48% -9.78% 43.94% -17.08%
Automatic Data Processing Inc.
Fidelity National Information Services Inc. -4.18% -5.24% 13.07% -2.69%
International Business Machines Corp. -1.64% -13.41% 34.45% -3.14%
Intuit Inc. 58.72% -34.22% -15.95% -34.47% -50.61%
Mastercard Inc. 52.06% 19.04% 47.01% 8.38%
Microsoft Corp. 17.68% -8.19% 7.37% -73.75% 137.66%
PayPal Holdings Inc.
salesforce.com inc. 10.57% -5.62% 28.07% -8.23%
ServiceNow Inc. -21.14% -12.82% 16.38% -387.26%
Visa Inc. -7.43% -2.71% -0.31% 1.88% -8.84%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Software & Services 11.67% -7.99% 3.92% -18.07% 42.34%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Information Technology 10.59% -6.24% -9.17% -17.50% 21.93%

Based on: 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31), 10-K (reporting date: 2017-05-31), 10-K (reporting date: 2016-05-31).

1 2021 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 10,957 ÷ [(43,643 + 41,257) ÷ 2] = 25.81%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Oracle Corp. improved earnings quality from 2020 to 2021.