Oracle Corp. (NYSE:ORCL)

The liquidity position demonstrates a significant cyclical trend characterized by a sharp contraction between 2021 and 2024, followed by a recovery phase beginning in 2025 and continuing through 2026.

Current Ratio

A substantial downward trend occurred from a peak of 2.30 in 2021 to a low of 0.72 in 2024. This indicates a period where current liabilities increased relative to current assets, resulting in a position where short-term obligations exceeded available current assets. A recovery is observed by 2026, with the ratio returning to a level of 1.12.

Quick Ratio

The quick ratio mirrored the trajectory of the current ratio, declining from 2.15 in 2021 to 0.59 in 2024. The close correlation between the current and quick ratios suggests that inventories played a minimal role in the overall liquidity shift. Stability was reached in 2025 before the ratio improved to 1.01 in 2026.

Cash Ratio

The most pronounced compression is evident in the cash ratio, which fell from 1.93 in 2021 to a plateau of 0.34 in 2024 and 2025. This represents a significant reduction in the most liquid assets available to cover immediate liabilities. Although a recovery to 0.76 was recorded in 2026, this ratio remains the lowest of the three measures, indicating a more constrained immediate cash position compared to 2021 levels.

Overall, the data indicates a period of heightened liquidity risk between 2023 and 2025, as all three ratios fell below the 1.0 threshold. The trend suggests a strategic or operational shift in working capital management that reached its nadir in 2024 before entering a phase of stabilization and improvement.

The liquidity profile exhibits significant volatility over the six-year period ending May 31, 2026. A pronounced downward trend in the current ratio is observed from 2021 through 2024, followed by a period of stabilization and a eventual recovery to a position where current assets exceed current liabilities.

Current Ratio Trajectory

The current ratio declined sharply from 2.30 in 2021 to a minimum of 0.72 in 2024. This trend indicates a substantial reduction in the margin of safety for meeting short-term obligations. For three consecutive years, from 2023 to 2025, the ratio remained below 1.0, signaling a period where short-term liabilities exceeded available liquid assets.

Asset and Liability Analysis

A primary driver of the liquidity contraction was the significant decrease in current assets, which fell from US$ 55,567 million in 2021 to US$ 21,004 million in 2023. While assets remained relatively stagnant between 2023 and 2025, current liabilities increased steadily from US$ 19,511 million in 2022 to US$ 32,643 million in 2025, further compressing the ratio.

Liquidity Restoration

A significant reversal occurred by May 31, 2026, as current assets surged to US$ 46,567 million. Despite a continued increase in current liabilities to US$ 41,764 million, the substantial growth in assets resulted in the current ratio rising to 1.12, effectively returning the entity to a positive net working capital position.

The liquidity position experienced a significant contraction followed by a partial recovery between May 31, 2021, and May 31, 2026. A pronounced decline in the ability to cover short-term obligations with liquid assets occurred during the first four years of the period, reaching a nadir in 2024 before trending upward again.

Quick Ratio Trend

The quick ratio experienced a sharp descent from a robust 2.15 in 2021 to a low of 0.59 in 2024. This represents a substantial erosion of the liquidity cushion, moving from a position of high surplus to a state where liquid assets covered only 59% of current liabilities. A marginal stabilization occurred in 2025 at 0.61, followed by a significant recovery to 1.01 by May 31, 2026, indicating a return to a balanced liquidity position where quick assets again equal short-term obligations.

Total Quick Assets Volatility

Liquid assets showed significant volatility, dropping from 51,963 million US dollars in 2021 to 17,102 million US dollars in 2023. While a gradual recovery began in 2024 and 2025, a sharp increase to 42,279 million US dollars was observed in 2026. This suggests a period of significant asset utilization or reallocation followed by a substantial replenishment of cash and cash-equivalent holdings toward the end of the observed period.

Current Liabilities Expansion

Current liabilities demonstrated a general upward trajectory after an initial dip in 2022. Obligations rose from 19,511 million US dollars in 2022 to 41,764 million US dollars in 2026. The simultaneous increase in liabilities and the decrease in quick assets between 2021 and 2024 acted as the primary driver for the deteriorating quick ratio, although the asset growth in 2026 eventually outpaced the liability growth to restore the ratio to a baseline of 1.01.

The financial trajectory of the cash ratio from 2021 to 2026 exhibits a period of significant volatility, characterized by a sharp initial decline followed by a subsequent recovery phase. A substantial reduction in liquidity is evident between 2021 and 2024, coinciding with a contraction in cash assets and a general increase in current liabilities.

Cash Asset Trends

Total cash assets experienced a precipitous decline from 46,554 million USD in 2021 to a low of 10,187 million USD in 2023. Following a period of relative stability between 2024 and 2025, a significant increase to 31,894 million USD is observed by May 31, 2026.

Current Liabilities Progression

Short-term obligations showed a general upward trajectory over the analyzed period, rising from 24,164 million USD in 2021 to 41,764 million USD in 2026. The steady increase in current liabilities, particularly between 2022 and 2024, exacerbated the downward pressure on the company's immediate liquidity position.

Cash Ratio Analysis

The cash ratio plummeted from a peak of 1.93 in 2021 to a trough of 0.34 in 2024 and 2025. This represents a shift from a position where cash assets nearly doubled current liabilities to a state where only 34% of short-term obligations could be covered by cash and cash equivalents. A recovery to 0.76 is noted in 2026, signaling an improved liquidity profile, although the ratio remains below the levels maintained in 2021 and 2022.