Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.

Oracle Corp., debt and solvency ratios

	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015	May 31, 2014
Debt to equity	2.58	1.33	1.08	0.93	0.86	0.52
Debt to capital	0.72	0.57	0.52	0.48	0.46	0.34
Interest coverage	6.97	7.43	7.47	8.88	12.33	16.10

Ratio	Description	The company
Debt-to-equity ratio	A solvency ratio calculated as total debt divided by total shareholders’ equity.	Oracle Corp.’s debt-to-equity ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Debt-to-capital ratio	A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity.	Oracle Corp.’s debt-to-capital ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Ratio	Description	The company
Interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments.	Oracle Corp.’s interest coverage ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Oracle Corp., debt to equity calculation, comparison to benchmarks

	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015	May 31, 2014
Selected Financial Data (USD $ in millions)
Notes payable and other borrowings, current	4,494	4,491	9,797	3,750	1,999	1,508
Notes payable and other borrowings, non-current	51,673	56,128	48,112	40,105	39,959	22,667
Total debt	56,167	60,619	57,909	43,855	41,958	24,175
Total Oracle Corporation stockholders’ equity	21,785	45,726	53,860	47,289	48,663	46,878
Ratio
Debt to equity¹	2.58	1.33	1.08	0.93	0.86	0.52
Benchmarks
Debt to Equity, Competitors
Adobe Inc.	—	0.44	0.22	0.26	0.27	0.22
Alphabet Inc.	—	0.02	0.03	0.03	0.04	0.05
Facebook Inc.	—	0.00	0.00	0.00	0.00	0.01
International Business Machines Corp.	—	2.73	2.66	2.31	2.80	3.44
Intuit Inc.	—	0.19	0.36	0.86	0.21	0.16
Microsoft Corp.	—	0.92	1.19	0.75	0.44	0.25
salesforce.com inc.	0.20	0.18	0.27	0.26	0.34	0.62
Debt to Equity, Sector
Software & Computer Services	—	0.45	0.51	0.42	0.39	0.32
Debt to Equity, Industry
Technology	—	0.59	0.60	0.49	0.45	0.32

2019 Calculations

¹ Debt to equity = Total debt ÷ Total Oracle Corporation stockholders’ equity
= 56,167 ÷ 21,785 = 2.58

Ratio	Description	The company
Debt-to-equity ratio	A solvency ratio calculated as total debt divided by total shareholders’ equity.	Oracle Corp.’s debt-to-equity ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Oracle Corp., debt to capital calculation, comparison to benchmarks

	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015	May 31, 2014
Selected Financial Data (USD $ in millions)
Notes payable and other borrowings, current	4,494	4,491	9,797	3,750	1,999	1,508
Notes payable and other borrowings, non-current	51,673	56,128	48,112	40,105	39,959	22,667
Total debt	56,167	60,619	57,909	43,855	41,958	24,175
Total Oracle Corporation stockholders’ equity	21,785	45,726	53,860	47,289	48,663	46,878
Total capital	77,952	106,345	111,769	91,144	90,621	71,053
Ratio
Debt to capital¹	0.72	0.57	0.52	0.48	0.46	0.34
Benchmarks
Debt to Capital, Competitors
Adobe Inc.	—	0.31	0.18	0.20	0.21	0.18
Alphabet Inc.	—	0.02	0.03	0.03	0.04	0.05
Facebook Inc.	—	0.00	0.00	0.00	0.00	0.01
International Business Machines Corp.	—	0.73	0.73	0.70	0.74	0.77
Intuit Inc.	—	0.16	0.26	0.46	0.18	0.14
Microsoft Corp.	—	0.48	0.54	0.43	0.31	0.20
salesforce.com inc.	0.17	0.15	0.21	0.21	0.26	0.38
Debt to Capital, Sector
Software & Computer Services	—	0.31	0.34	0.30	0.28	0.24
Debt to Capital, Industry
Technology	—	0.37	0.37	0.33	0.31	0.24

2019 Calculations

¹ Debt to capital = Total debt ÷ Total capital
= 56,167 ÷ 77,952 = 0.72

Ratio	Description	The company
Debt-to-capital ratio	A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity.	Oracle Corp.’s debt-to-capital ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Oracle Corp., interest coverage calculation, comparison to benchmarks

	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015	May 31, 2014
Selected Financial Data (USD $ in millions)
Net income	11,083	3,825	9,335	8,901	9,938	10,955
Add: Net income attributable to noncontrolling interest	152	135	118	116	113	98
Add: Income tax expense	1,185	9,066	2,182	2,541	2,896	2,749
Add: Interest expense	2,082	2,025	1,798	1,467	1,143	914
Earnings before interest and tax (EBIT)	14,502	15,051	13,433	13,025	14,090	14,716
Ratio
Interest coverage¹	6.97	7.43	7.47	8.88	12.33	16.10
Benchmarks
Interest Coverage, Competitors
Adobe Inc.	—	32.31	29.73	21.37	14.61	7.05
Alphabet Inc.	—	307.25	250.48	195.76	189.95	171.88
Facebook Inc.	—	2,818.89	3,433.33	1,252.80	270.30	214.48
International Business Machines Corp.	—	16.71	19.56	20.60	35.09	42.31
Intuit Inc.	—	76.15	45.10	35.37	27.37	43.39
Microsoft Corp.	—	14.35	11.42	16.89	24.70	47.60
salesforce.com inc.	7.38	3.32	1.29	1.89	-1.91	-3.64
Interest Coverage, Sector
Software & Computer Services	—	22.66	20.72	23.73	28.81	38.21
Interest Coverage, Industry
Technology	—	21.47	21.65	24.56	38.02	46.43

2019 Calculations

¹ Interest coverage = EBIT ÷ Interest expense
= 14,502 ÷ 2,082 = 6.97

Ratio	Description	The company
Interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments.	Oracle Corp.’s interest coverage ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Oracle Corp. (ORCL)

Long-term Debt and Solvency Analysis