Oracle Corp. (NYSE:ORCL)

The analysis of the quarterly financial data reveals several notable trends across the key performance indicators: Return on Assets (ROA), Financial Leverage, and Return on Equity (ROE).

Return on Assets (ROA)

The ROA begins with available data starting in May 2020 at 8.78%, then shows a gradual increase, peaking at 11.35% in November 2021. Following this peak, there is a noticeable decline to as low as 4.46% by May 2022. From this low point, ROA recovers moderately, stabilizing in the range of approximately 6.33% to 7.83% from late 2022 through mid-2025, though it exhibits a slight downward tick towards the final recorded period, ending at 6.89% in August 2025.

Financial Leverage

Financial leverage demonstrates substantial volatility throughout the observed periods. Starting at a moderate 5.76 ratio in August 2019, it progressively rises, reaching an extraordinary peak of 125.24 by November 2022. This sharp spike indicates a significant increase in the use of debt relative to equity during this timeframe. Subsequently, leverage declines steadily and significantly, achieving a more normalized level of 7.47 by August 2025. The data suggests periods of aggressive leveraging followed by deleveraging attempts or adjustments in capital structure.

Return on Equity (ROE)

The ROE exhibits an extreme degree of fluctuation. Early data from May 2020 show a value of 83.94%, escalating sharply to a peak of 262.43% by August 2021, and later reaching a striking high of 792.45% in November 2022. Following the peak, ROE declines drastically, moving down to 51.51% by August 2025. Such variability indicates highly leveraged returns on shareholder equity, aligning with financial leverage trends. The elevated ROE levels appear to be driven by the increased financial leverage, implying that gains or losses are significantly amplified for shareholders during the periods analyzed.

In summary, the data presents a scenario of initially growing profitability on assets accompanied by increasing leverage, culminating in exceptionally high returns on equity during late 2021 and 2022. However, these metrics converge toward more moderate and stabilized values by mid-2025, suggesting a possible strategic shift to reduce leverage and normalize returns. The fluctuations indicate periods of aggressive capital structuring and risk-taking, followed by measured stabilizing actions.

The analyzed financial ratios exhibit various notable trends over the reported periods.

Net Profit Margin (%)

The net profit margin demonstrates an initial upward trend, rising from approximately 25.94% in May 2020 to a peak near 34.16% by November 2021. Subsequently, there is a significant decline reaching a low point of 13.15% in May 2022. Following this trough, the margin steadily improves, stabilizing around the low 20% range from late 2023 through August 2025.

Asset Turnover (ratio)

This ratio remains relatively stable throughout the periods, fluctuating mildly between 0.31 and 0.39 from May 2020 to early 2023, indicating consistent efficiency in asset utilization. From 2023 onward, a gradual decline is observable, with the ratio decreasing from about 0.38 to 0.33 by August 2025, suggesting a slight reduction in revenue generated per unit of assets.

Financial Leverage (ratio)

Financial leverage experiences dramatic variation. Initially, it increases from 5.76 in August 2019 to a sharp peak at 25.03 in May 2021, followed by missing data for several periods. Later data shows an extraordinary spike, reaching 125.24 in November 2022, before steadily decreasing over subsequent quarters to a more moderate level of around 7.47 by August 2025. This pattern indicates phases of significant increase in debt relative to equity, with a marked deleveraging trend starting late 2022 onward.

Return on Equity (ROE) (%)

ROE exhibits highly volatile behavior. From May 2020, it rises sharply from approximately 83.94% to a peak exceeding 262% in August 2021. Several data gaps follow, but available figures reveal an extreme escalation to 792.45% by November 2022, possibly linked to the surge in financial leverage. Subsequently, ROE declines steadily yet remains extraordinarily high in comparison to usual benchmarks, converging near 51.51% by August 2025. This suggests a period of high profitability magnified by leverage, followed by normalization as leverage decreases.

Overall, the data points to an initial phase of increasing profitability and leverage, followed by a period of extreme leverage and return volatility. In the most recent periods, there is evidence of partial stabilization with improved net margins, reduced financial leverage, and moderate asset turnover declines. The substantial fluctuations in financial leverage and ROE warrant careful monitoring given their potential impact on financial risk and returns.

The analysis of the financial ratios over the observed periods reveals several notable trends and variations.

Tax Burden

The tax burden ratio begins at 0.84 and shows a slight upward trend, peaking at 1.19 before declining gradually back to 0.86. This indicates an initially stable tax impact on earnings followed by a temporary increase that subsequently normalizes.

Interest Burden

The interest burden displays a generally decreasing trend from 0.86 down to 0.7, indicating a reduced impact of interest expenses relative to earnings over certain periods. However, towards the latter data points, it slightly increases again, stabilizing around 0.8.

EBIT Margin

Starting near 36%, the EBIT margin peaks slightly above 38% before experiencing a sharp decline to approximately 21%. Following this low, the margin steadily recovers, ascending back to the low 30% range in the most recent quarters, suggesting fluctuations in operational profitability with a recovery trend in later periods.

Asset Turnover

Asset turnover remains relatively consistent, fluctuating modestly between 0.31 and 0.39. The ratio slightly declines in the later periods, ending near 0.33, which may indicate a decrease in efficiency in using assets to generate revenue.

Financial Leverage

Financial leverage shows a marked increase from 5.76 to an extraordinary peak above 125. This suggests a significant rise in the company’s reliance on debt financing or equity leverage at its height, before sharply decreasing over subsequent periods to a more moderate level around 7.5. Such volatility in leverage suggests periods of aggressive capital structure changes.

Return on Equity (ROE)

The ROE exhibits a dramatic upward spike, reaching as high as 792%, which is an extraordinary return figure. It subsequently declines significantly but remains elevated relative to typical levels, settling around 50% towards the end. This pattern reflects highly variable profitability and possibly significant effects of leverage or one-off gains in certain periods.

Overall, the data indicate periods of substantial financial fluctuation, particularly in leverage and profitability metrics. While operational efficiency and margins faced challenges mid-period, there is a visible recovery. The extreme volatility in leverage and ROE merits further investigation to understand underlying causes, such as changes in debt levels, asset base, or extraordinary financial events.

Net Profit Margin

The net profit margin exhibits a general downward trend from a peak of approximately 34.16% in November 2021 to lower levels around 13.15% by May 2022. Following this decline, the margin shows some recovery and stabilization, fluctuating mostly in the range between 17% and 22% from mid-2022 through to August 2025. This indicates an initial contraction in profitability, with subsequent moderate improvement and maintenance of profit margins in the later periods.

Asset Turnover

The asset turnover ratio starts at about 0.34 in May 2020 and experiences minor fluctuations while generally maintaining a level between 0.31 and 0.39 through to November 2021. From that point onward, the ratio stabilizes more closely around 0.35 to 0.38, with a slight decline noticed toward the latter part of the series, approaching 0.33 by August 2025. This suggests a relatively steady efficiency in generating revenue from assets over time, with small variations indicating modest changes in asset utilization effectiveness.

Return on Assets (ROA)

The ROA shows an increasing trend early on, rising from 8.78% in May 2020 to a peak of 11.35% in November 2021. After this peak, there is a notable decline through to August 2022, where ROA falls to approximately 4.46%. Subsequently, the figure gradually recovers and stabilizes at between 6% and 7.8% for the remaining periods, ending around 6.89% in August 2025. This pattern reflects initially improving asset profitability, followed by a significant drop and then a phase of gradual recovery and relative stability.

The financial ratios and margins indicate several notable trends over the observed periods. The tax burden ratio initially rises from 0.84 in mid-2020, peaking at 1.19 in early 2022, and then gradually declines and stabilizes around 0.86 to 0.88 in the later periods. This fluctuation suggests variability in the company's effective tax rate or tax-related expenses during the earlier years, followed by a period of relative tax stability.

The interest burden ratio exhibits a general downward trend from 0.86 in mid-2020 to a low of 0.70 in late 2022, signaling a reduction in interest expenses relative to earnings before interest and taxes over this period. However, from late 2022 onwards, it trends upward modestly, reaching 0.80 by mid-2025, indicative of a slight increase in interest expense burden in recent quarters.

The EBIT margin percentage shows a strong increasing trend from mid-2020 to late 2021, peaking near 38.37%. A sharp decline follows, reaching a low of 21.43% by mid-2022, possibly reflecting operational challenges or increased costs. Subsequently, the margin recovers progressively to around 30.63% by mid-2025, indicating improved operational efficiency or profitability in the later periods.

Asset turnover fluctuates moderately throughout the timeline. Initially, it remains relatively stable around 0.34-0.36, before improving to about 0.39 during late 2020 to early 2022. Afterward, it gradually declines to approximately 0.33 by mid-2025. This pattern may imply changes in asset utilization efficiency, with a peak in asset productivity followed by some reduction in later years.

Return on assets (ROA) mirrors these trends with an initial rise from 8.78% to a high of 11.35% in late 2020, followed by a significant decrease to 4.46% by mid-2022. Thereafter, ROA improves steadily, stabilizing around 6.89% by mid-2025. These movements indicate that the company experienced a period of high asset profitability that later faced pressure, but then saw a recovery phase, albeit not reaching the previous peak levels.

Tax Burden

Increased in early periods, peaking above 1.0 in early 2022, then gradually decreased and stabilized below 0.9 in later periods.

Interest Burden

Declined steadily until late 2022, suggesting improving interest cost management, then experienced a slight rise towards mid-2025.

EBIT Margin

Showed strong growth to nearly 38.4%, followed by a sharp decline to 21.4%, then a gradual recovery to just above 30% by the end.

Asset Turnover

Generally stable with a modest peak near 0.39, then decreasing towards 0.33, indicating some variability in asset efficiency.

Return on Assets (ROA)

Experienced an initial increase to over 11%, followed by a reduction to below 5%, then a moderate recovery stabilizing around 6.9%.

The financial ratios for the periods provided reveal several notable trends in profitability and burden measures over time.

Tax Burden

The tax burden ratio displays some variability, starting around 0.84 in mid-2020 and rising above 1.0 in late 2020 and early 2021, peaking at 1.19 in early 2022. Following this peak, the ratio declines steadily and stabilizes in the range of approximately 0.86 to 0.93 from mid-2022 through late 2025. This suggests a fluctuation in tax impact with an eventual normalization in later periods.

Interest Burden

The interest burden ratio generally trends downward from 0.86 in mid-2020 to a low of 0.70 by late 2022, implying a reduction in interest expense relative to earnings before interest and taxes during this interval. From late 2022 forward, the ratio exhibits a gradual increase, rising up to 0.80 by mid to late 2025, indicating a slight increase in interest charges relative to operating profit in recent periods.

EBIT Margin

The EBIT margin shows a downward trajectory from a peak of about 38.37% in late 2020 to a trough around 21.43% by mid-2022. Following this decline, the margin improves gradually, reaching approximately 30.9% by mid-2025. This pattern indicates a period of margin compression in 2021-2022, with subsequent recovery in operating profitability.

Net Profit Margin

Net profit margin exhibits similar dynamics to the EBIT margin but with deeper fluctuations. It rose from roughly 25.94% in mid-2020 to a peak of 34.16% late 2020, then sharply declined to less than half that level (around 13.15%) by mid-2022. After reaching this low, it recovers steadily, achieving levels near 21.68% by early 2025. The fluctuation reflects periods of lower net income relative to revenue, possibly due to higher costs or other financial factors, followed by a moderate improvement.

Overall, the data suggests that the company experienced a challenging period marked by declining profitability margins between late 2020 and mid-2022, accompanied by variations in tax and interest burdens. Post-2022, there is a clear trend toward recovery in operating and net profit margins, although tax and interest burdens remain variable. This pattern could reflect changes in cost structure, financing expenses, tax strategy, or broader economic conditions affecting financial performance.