Oracle Corp. (NYSE:ORCL)

Current Ratio

The current ratio exhibits a declining trend from 2.66 in August 2020 to a low of 0.6 in August 2022, indicating a significant reduction in short-term liquidity over this period. Following this decline, there is a moderate recovery peaking at 1.02 in February 2025. However, subsequent values show a slight decrease again, ending at 0.62 in August 2025. Overall, the ratio moves from a strong liquidity position above 2.0 to a level consistently below 1.0 in the latter periods, suggesting potential challenges in meeting short-term liabilities.

Quick Ratio

The quick ratio mirrors the pattern observed in the current ratio, starting at 2.5 in August 2020 and gradually declining to 0.49 in August 2022. Thereafter, it rebounds moderately to 0.87 by May 2025 before tapering off to 0.5 at the end of the data period. This trend indicates a similar decline and partial recovery in the ability to cover immediate liabilities with liquid assets, excluding inventory. Despite the recovery, the ratio remains below 1.0 for extended periods, indicating potential liquidity constraints.

Cash Ratio

The cash ratio follows the overall downward trend but is generally lower than the current and quick ratios, starting from 2.26 in August 2020 and decreasing sharply to 0.32 by August 2022. A modest increase occurs subsequently, reaching 0.6 in May 2025, which is the highest point after the decline. The final observations show a drop to 0.28 in August 2025. This suggests a reduced capacity to cover current liabilities solely with cash and cash equivalents, highlighting tighter liquidity conditions over time.

General Observations

Across all three liquidity ratios, a consistent pattern emerges: a significant decline from mid-2020 through mid-2022, followed by a partial recovery and subsequent fluctuation. The sharp deterioration in liquidity ratios during the initial period could imply operational or financial challenges affecting short-term asset availability or an increase in current liabilities. The partial recovery phase suggests some improvement in liquidity management or asset structure, although ratios remain below traditional safety thresholds in most recent quarters. The overall trend implies increasingly constrained liquid asset coverage against short-term obligations, which may warrant closer monitoring and possible strategic adjustments.

The financial data reveals significant fluctuations in current assets and current liabilities over the analyzed periods, impacting the current ratio and thereby indicating changing short-term liquidity conditions.

Current Assets

The current assets exhibited a declining pattern from the initial value of 49,939 million USD to a lower range around 31,000 USD during late 2020 and early 2021. Subsequent quarters showed intermittent recovery and drops, reaching a notable low of approximately 17,561 million USD in November 2022. Following this, there was a gradual recovery towards values close to 23,000 million USD by late 2024-early 2025, with the last period ending at 24,634 million USD. Overall, current assets have trended downward relative to the starting point, with a volatile pattern marked by troughs and partial recoveries.

Current Liabilities

Current liabilities fluctuated without a consistent trend but generally showed an increasing tendency over the timeline. From around 18,748 million USD at the start, liabilities increased sharply to a peak of nearly 39,874 million USD by August 2025. Notable surges occurred in mid to late 2022 and again in the 2024-2025 period, with liabilities continuously outpacing assets toward the latter quarters.

Current Ratio

The current ratio trend highlights declining liquidity over time. Initially strong at 2.66, the ratio decreased steadily through 2020 and 2021, reaching values near or below 1.0 from August 2022 forward. The lowest liquidity ratios were observed around 0.6, indicating that current liabilities significantly exceeded current assets during this period. Some minor improvements are noted intermittently, but the ratio remained below 1.0 in most recent quarters, suggesting persistent pressure on the company's ability to cover short-term obligations with short-term assets.

In summary, the data indicates a weakening short-term financial position over the period under review. Current assets declined and became increasingly insufficient relative to growing current liabilities, resulting in a current ratio moving well below the standard benchmark of 1.0. This may suggest elevated liquidity risk and warrants attention to working capital management and short-term funding strategies.

Overall Trends in Total Quick Assets

Total quick assets demonstrated notable variability over the periods analyzed. Initially, there was a moderate decline from 46,855 million USD in August 2020 to 40,501 million USD by February 2021. Subsequently, a recovery phase was observed till May 2021, reaching 51,963 million USD. After this peak, total quick assets exhibited a general downward trend with occasional fluctuations. From November 2021 onwards, total quick assets stabilized around the range of approximately 13,547 million to 18,602 million USD, indicating a contraction compared to earlier periods. In the most recent periods up to August 2025, values fluctuated between roughly 19,000 million and 25,800 million USD, reflecting some recovery yet remaining below initial highs.

Dynamics of Current Liabilities

Current liabilities showed an overall increasing trend across the examined quarters. From 18,748 million USD in August 2020, current liabilities generally rose, with some moderate declines or stabilization periods. Notably, there was a significant jump from 19,511 million USD in May 2022 to 34,819 million USD in August 2022. Following this, current liabilities maintained relatively high levels, staying mostly above 22,000 million USD and reaching 39,874 million USD by August 2025. The overall pattern suggests increasing short-term obligations, which may impact liquidity and working capital management.

Quick Ratio Analysis

The quick ratio experienced a consistent decline over the analyzed period, indicating a relative decrease in liquidity. Starting at a strong 2.5 in August 2020, the ratio decreased steadily until reaching values below 1 from August 2022 onward. The lowest levels were observed around November 2024 and May 2025, with ratios close to 0.5 to 0.6. This trend implies that quick assets are less able to cover current liabilities without relying on inventory sales, which may suggest heightened liquidity risk. Periods of marginal improvement were observed but did not reverse the overall declining tendency.

Implications

The interplay between decreasing quick assets, increasing current liabilities, and the resultant decline in the quick ratio points to a potential tightening in short-term liquidity. The data signifies a shift from a robust liquidity position in early periods toward more constrained circumstances in recent years. This situation warrants close monitoring and potential action to manage working capital effectively and maintain financial flexibility.

The analysis of the quarterly financial data reveals several noteworthy trends in liquidity and cash management over the observed periods.

Total Cash Assets

Total cash assets exhibited a generally declining trend from August 31, 2020, to August 31, 2022, dropping from 42,279 million USD to 11,220 million USD. After reaching this low point, cash assets showed some recovery and fluctuations, rising to peaks such as 12,083 million USD by August 31, 2023, before again fluctuating around 11,000 to 17,823 million USD in subsequent quarters. Notably, there was a small increase to 17,823 million USD by August 31, 2025, indicating some improvement in cash reserves towards the end of the data series.

Current Liabilities

Current liabilities fluctuated considerably across the periods, starting at 18,748 million USD in August 2020 and generally increasing over time with periods of volatility. Significant spikes were observed at several points, peaking at 39,874 million USD by August 31, 2025. The overall trend points to an increasing burden of short-term liabilities, suggesting possibly higher operational or financial obligations over time.

Cash Ratio

The cash ratio, reflecting liquidity by comparing total cash assets to current liabilities, demonstrated a declining trend from 2.26 in August 2020 to 0.28 by May 2025. Early periods showed the company maintaining a strong liquidity position with ratios above 1, indicating cash assets exceeded current liabilities. However, from around August 2022 onward, the ratio dropped sharply below 0.5, with several quarters hovering notably below 0.4, suggesting diminished immediate liquidity coverage and increased reliance on other forms of assets or financing to meet current obligations.

Overall Insights

Over the time frame analyzed, the company experienced a clear reduction in cash reserves alongside rising current liabilities, resulting in a declining cash ratio and potentially tighter liquidity conditions. While total cash assets had some intermittent gains after periods of decline, the persistent increase in current liabilities exerted downward pressure on liquidity metrics. This pattern could reflect strategic shifts in working capital management, investment activities, debt levels, or operational demands. The declining cash ratio below 1 signals that immediate cash resources may be insufficient to cover short-term liabilities, which could warrant attention regarding liquidity risk management.