Oracle Corp. (NYSE:ORCL)

The solvency position, as indicated by the provided ratios, demonstrates a period of increasing financial risk followed by a notable improvement and subsequent stabilization. Initially, ratios suggest a moderate level of debt, but a significant increase in leverage is observed in early 2021, peaking in February 2023, before gradually declining through the end of the observed period.

Debt to Equity

The debt to equity ratio experienced substantial volatility. It began at 7.46 and rose to 16.08 before peaking at an exceptionally high 84.33 in February 2023. Following this peak, the ratio exhibits a consistent and significant decline, reaching 3.50 by February 2026. This suggests a substantial reduction in reliance on equity financing relative to debt.

Debt to Equity (Including Operating Lease Liability)

This ratio mirrors the trend of the standard debt to equity ratio, indicating that operating lease liabilities contribute significantly to the overall debt profile. The peak value of 84.33 in February 2023 is consistent with the standard debt to equity ratio peak, and the subsequent decline follows a similar pattern, ending at 3.98 in February 2026.

Debt to Capital

The debt to capital ratio shows a gradual increase from 0.88 to 1.15, then stabilizes between 1.03 and 1.07 for several quarters. A subsequent decline is observed, falling to 0.78 by February 2026. This indicates a decreasing proportion of debt financing relative to the total capital structure.

Debt to Capital (Including Operating Lease Liability)

Similar to the standard debt to capital ratio, this metric demonstrates a slight increase followed by a decline. The inclusion of operating lease liabilities results in slightly higher values, but the overall trend remains consistent, ending at 0.80 in February 2026.

Debt to Assets

The debt to assets ratio fluctuates between 0.59 and 0.73, with a slight upward trend initially, followed by a gradual decline to 0.55 by February 2026. This suggests a decreasing proportion of assets financed by debt.

Debt to Assets (Including Operating Lease Liability)

This ratio exhibits a similar pattern to the standard debt to assets ratio, with the inclusion of operating lease liabilities resulting in slightly higher values. The trend concludes at 0.62 in February 2026.

Financial Leverage

Financial leverage demonstrates a dramatic increase, peaking at 125.24 in February 2023, coinciding with the peak in debt to equity. A substantial decrease follows, with the ratio declining to 6.37 by February 2026. This indicates a significant reduction in the company’s use of leverage.

Interest Coverage

The interest coverage ratio initially declines from 6.76 to 3.78, reflecting the increased debt burden. However, it then stabilizes and shows a modest improvement, reaching 5.43 by February 2026. This suggests an improved ability to meet interest obligations as debt levels decrease.

In summary, the observed period is characterized by a significant increase in debt levels, peaking in early 2023, followed by a concerted effort to reduce debt and improve solvency ratios. The trend indicates a successful deleveraging strategy, resulting in a more stable and less risky financial position by the end of the analyzed timeframe.

The debt-to-equity ratio exhibits significant fluctuations over the observed period. Initially, the ratio demonstrates a relatively stable, albeit high, level, followed by a period of substantial increase and subsequent decline. A notable shift in the ratio is evident beginning in the latter half of 2020, continuing into 2021.

Initial Period (Aug 31, 2020 – Feb 28, 2021)

From August 2020 through February 2021, the debt-to-equity ratio ranged between 7.46 and 8.94. This indicates a consistently high level of debt relative to equity, suggesting a reliance on debt financing. The ratio increased slightly during this period.

Significant Increase (May 31, 2021 – Feb 28, 2022)

A dramatic increase in the debt-to-equity ratio is observed from May 2021. The ratio reached a peak of 16.08 in May 2021, and remained elevated through February 2022. This suggests a substantial increase in debt, potentially due to acquisitions, financing activities, or operational needs, coupled with a decrease in stockholders’ equity. The negative equity values observed during this period further exacerbate the ratio.

Decline and Stabilization (May 31, 2022 – Feb 28, 2026)

Following February 2022, the debt-to-equity ratio began a consistent downward trend. The ratio decreased from 84.33 in May 2022 to 3.50 in February 2026. This decline is attributable to a combination of factors, including a reduction in total debt and a recovery, and subsequent growth, in stockholders’ equity. The ratio appears to be stabilizing in the range of 3.50 to 3.85 during this period.

Recent Trend (Feb 29, 2024 – Nov 30, 2025)

The most recent observations indicate a slight increase in the ratio from 3.50 to 5.75. While still relatively low compared to previous periods, this warrants monitoring to determine if it signals a shift in financing strategy or operational performance. The ratio remains below 6.00, suggesting a more balanced capital structure compared to earlier periods.

Overall, the company experienced a period of increasing financial leverage followed by a significant deleveraging and stabilization of its capital structure. The recent slight increase in the debt-to-equity ratio should be monitored for potential implications.

The debt-to-equity ratio, including operating lease liability, exhibits significant fluctuations over the observed period. Initially, the ratio demonstrates a relatively stable, albeit high, level, followed by a period of substantial increase and subsequent decline.

Initial Period (Aug 31, 2020 – May 31, 2021)

From August 31, 2020, to May 31, 2021, the ratio increased from 7.46 to 16.08. This indicates a growing reliance on debt financing relative to equity during this timeframe. Total debt increased notably, while stockholders’ equity decreased considerably.

Period of High Leverage (Aug 31, 2021 – Feb 28, 2023)

The period from August 31, 2021, through February 28, 2023, is characterized by extreme volatility in the ratio. Stockholders’ equity experienced a significant decline, reaching a substantial deficit by November 30, 2021, and remaining negative through February 28, 2022. Consequently, the ratio peaked at 84.33 in February 2023. While total debt remained relatively stable during this period, the shrinking equity base dramatically inflated the ratio.

Improvement and Stabilization (May 31, 2023 – Aug 31, 2025)

Beginning May 31, 2023, a clear downward trend in the debt-to-equity ratio is observed. This coincides with a recovery in stockholders’ equity, moving from a deficit to a positive value and increasing steadily. The ratio decreased from 37.53 to 3.98 by August 31, 2025, suggesting improved financial leverage. Total debt remained relatively consistent, while equity grew substantially.

Recent Trend (Nov 30, 2025 – May 31, 2025)

From November 30, 2025, to May 31, 2025, the ratio experienced a slight increase, rising from 3.98 to 4.15. This is attributable to a faster growth in total debt compared to stockholders’ equity. However, the ratio remains at a significantly lower level than observed in the earlier periods.

Overall, the analysis reveals a transition from a period of increasing and then extremely high leverage to a period of improving financial health, characterized by a substantial reduction in the debt-to-equity ratio. The recent slight increase warrants monitoring, but the overall trend indicates a strengthening financial position.

The debt to capital ratio for the analyzed period demonstrates a generally decreasing trend, although with notable fluctuations. Initially, the ratio exhibited a slight increase before declining over the subsequent quarters. A more pronounced increase occurred in the latter half of 2021, followed by a period of relative stability and then a consistent downward trajectory through 2025.

Initial Period (Aug 31, 2020 – May 31, 2021)

The debt to capital ratio began at 0.88 and experienced a modest increase, peaking at 0.94 in May 2021. This suggests a slight increase in the proportion of debt financing relative to total capital during this timeframe. The increase in total debt contributed to this rise.

Peak and Subsequent Decline (Aug 31, 2021 – Feb 28, 2023)

A significant increase was observed in August 2021, with the ratio reaching 1.02, and further escalating to 1.15 by November 2021. This indicates a substantial reliance on debt financing. However, the ratio then began a consistent decline, falling to 1.03 by February 2023. This decrease coincided with a relative stabilization of total debt and an increase in total capital.

Continued Downward Trend (May 31, 2023 – Feb 28, 2026)

The downward trend continued from May 2023 through February 2026, with the ratio decreasing from 0.99 to 0.78. This suggests a strengthening of the capital structure, with a decreasing reliance on debt. While total debt increased significantly in the final two periods, the growth in total capital outpaced it, driving the ratio lower. The most substantial decrease occurred between February 2025 and February 2026.

Overall, the observed pattern suggests a shift towards a more conservative capital structure over the analyzed period, particularly after the peak in late 2021. The company appears to have managed its debt levels effectively, especially considering the growth in total capital. The final periods indicate a significant increase in both debt and capital, but the capital increase was proportionally larger, resulting in a lower debt to capital ratio.

The debt to capital ratio, including operating lease liability, exhibits a fluctuating pattern over the observed period. Initially, the ratio remained relatively stable, hovering around 0.88 to 0.94 from August 2020 to February 2021. A subsequent increase is noted, peaking at 1.15 in November 2021, before declining to 1.09 by February 2022. From May 2022 through February 2023, the ratio demonstrated a consistent downward trend, decreasing from 1.07 to 0.99. This downward momentum continued, reaching a low of 0.81 in February 2025 and remaining at that level in February 2026.

Initial Stability & Subsequent Increase (Aug 2020 – Nov 2021)

The ratio began within a narrow range, indicating a consistent capital structure. The increase observed in late 2021 suggests a potential rise in debt levels relative to capital, or a decrease in capital, or a combination of both. This period warrants further investigation to understand the underlying drivers of this change.

Decline in Leverage (Feb 2022 – Feb 2025)

A clear downward trend in the debt to capital ratio is evident during this period. This suggests a strengthening of the capital structure, potentially through debt reduction, equity issuance, or increased retained earnings. The consistent decline indicates a deliberate or favorable shift in financial leverage.

Recent Increase (Feb 2025 – Nov 2025)

The ratio increased significantly from 0.81 in February 2025 to 0.80 in February 2026. This increase, while substantial in percentage terms, is occurring from a relatively low base. The cause of this increase should be investigated.

Overall Trend

Despite the recent increase, the overall trend suggests a gradual decrease in financial leverage over the majority of the analyzed period. The ratio has moved from approximately 0.88 to 0.80, indicating a more conservative capital structure. However, the recent increase in the ratio warrants monitoring to determine if it represents a temporary fluctuation or the beginning of a new trend.

The fluctuations in the debt to capital ratio suggest active management of the company’s capital structure or responsiveness to external financial conditions. Continued monitoring of this ratio, alongside other solvency metrics, is recommended to assess the long-term financial health and stability.

The debt-to-assets ratio for the analyzed period demonstrates a fluctuating pattern, generally remaining within a relatively narrow band before exhibiting more pronounced changes in later periods. Initially, the ratio increased from 0.62 in August 2020 to 0.64 in November 2020, followed by a slight decrease to 0.59 in February 2021. It then rose again to 0.64 in May 2021 and continued to 0.67 in August 2021.

A more significant upward trend is observed from August 2021 through February 2022, with the ratio increasing from 0.67 to 0.73, peaking at 0.73 in November 2021, before settling at 0.72 in February 2022. The ratio then decreased to 0.69 in May 2022 and remained relatively stable around 0.70-0.71 through November 2022.

Trend Analysis (August 2020 - November 2022)

During this period, the debt-to-assets ratio exhibited moderate volatility, generally fluctuating between 0.59 and 0.73. The overall trend was relatively flat, suggesting a consistent, though not dramatically changing, level of financial leverage.

From February 2023 onwards, a distinct downward trend emerges. The ratio decreased from 0.70 to 0.67 in February 2023, continuing to 0.65 by August 2023. This decline accelerated in subsequent periods, reaching 0.51 in May 2025. A slight increase to 0.53 is noted in August 2025, followed by a further increase to 0.55 in February 2026.

Trend Analysis (February 2023 - February 2026)

This period is characterized by a consistent and substantial decrease in the debt-to-assets ratio. The ratio fell from 0.70 to 0.55, indicating a significant reduction in the proportion of assets financed by debt. This suggests a strengthening of the company’s financial position and a decreased reliance on borrowing.

The most recent data point, February 2026, shows a ratio of 0.55, representing the lowest value observed throughout the entire analyzed period. This indicates a notable improvement in the company’s solvency position compared to earlier periods.

Overall Observations

The company initially maintained a relatively stable debt-to-assets ratio, followed by a period of increasing leverage. However, a clear and consistent deleveraging trend has been evident in the more recent quarters, culminating in the lowest ratio recorded within the analyzed timeframe.

The debt-to-assets ratio, including operating lease liabilities, exhibits a fluctuating pattern over the observed period. Initially, the ratio increased from 0.62 in August 2020 to a peak of 0.73 in November 2021. Subsequently, the ratio generally decreased, reaching a low of 0.58 in August 2023, before increasing again to 0.62 in February 2026.

Initial Increase (Aug 31, 2020 – Nov 30, 2021)

From August 2020 through November 2021, the ratio experienced a consistent upward trend. This indicates a growing reliance on debt financing relative to the company’s asset base. The increase from 0.62 to 0.73 suggests a potential shift in the capital structure, possibly due to increased borrowing or a decrease in asset value.

Subsequent Decline (Nov 30, 2021 – Aug 31, 2023)

Following the peak in November 2021, the ratio generally declined, reaching 0.58 in August 2023. This suggests a reduction in debt levels or an increase in asset values, improving the company’s solvency position. The decrease, while not monotonic, indicates a positive trend in the company’s financial leverage.

Recent Increase (Aug 31, 2023 – Feb 28, 2026)

From August 2023 to February 2026, the ratio increased from 0.58 to 0.62. This recent increase suggests a renewed reliance on debt financing or a slower growth rate in assets. The increase to 0.62, while not reaching the previous high, warrants monitoring to assess whether it represents a sustained trend.

Volatility

The ratio demonstrates moderate volatility throughout the period. While there are clear trends, the fluctuations suggest that the company’s debt and asset levels are subject to change, potentially influenced by business cycles, investment decisions, or accounting adjustments. The largest single increase occurred between May 2024 and May 2025.

Overall, the debt-to-assets ratio indicates a dynamic financial structure. While the company has demonstrated periods of deleveraging, recent trends suggest a potential increase in financial leverage. Continued monitoring of this ratio is recommended to assess the long-term sustainability of the company’s capital structure.

The financial leverage of the company, as indicated by the provided figures, demonstrates significant volatility over the observed period. Initially, from August 2020 through February 2021, the ratio exhibited an increasing trend, suggesting a growing reliance on debt financing relative to equity. A substantial spike in financial leverage occurred in May 2021, reaching 25.03, before becoming unavailable for the subsequent two quarters. Following this peak, the ratio experienced a dramatic decline, falling to 6.37 by February 2026.

Initial Increase (Aug 2020 - Feb 2021)

The financial leverage ratio increased from 11.96 in August 2020 to 13.27 in February 2021. This indicates that the company was employing more debt to finance its assets during this period. The increase, while notable, remained within a relatively contained range.

Peak and Subsequent Decline (May 2021 - Feb 2026)

The ratio peaked sharply at 25.03 in May 2021, followed by missing values for the next two quarters. From May 2021 to February 2026, the ratio decreased substantially, from 25.03 to 6.37. This suggests a significant shift in the company’s capital structure, potentially through debt reduction, equity increases, or a combination of both. The rate of decline was most pronounced in the earlier part of this period.

Stabilization (Feb 2026 - May 2025)

After the initial steep decline, the financial leverage ratio exhibited a more stable trend, fluctuating between 6.37 and 8.23 from February 2026 to May 2025. This suggests a period of relative stability in the company’s capital structure. The ratio continued to decrease, albeit at a slower pace.

The observed changes in financial leverage are accompanied by fluctuations in total assets and stockholders’ equity. The initial increase in leverage coincided with asset growth, while the subsequent decline occurred alongside a recovery and growth in stockholders’ equity, moving from a deficit to a positive value. The significant reduction in financial leverage suggests a strengthening of the company’s financial position and a reduced reliance on debt financing.

The interest coverage ratio for the analyzed period demonstrates fluctuations, generally indicating a moderate ability to meet interest obligations from earnings. An initial period of relative stability is followed by a period of decline, then a recovery, and finally a period of stabilization at a higher level.

Initial Stability & Decline (Aug 31, 2020 – Nov 30, 2021)

From August 31, 2020, to November 30, 2021, the interest coverage ratio experienced a gradual decline. Starting at 6.76, it decreased to 4.23. This suggests a weakening in the company’s ability to cover its interest expense with earnings before interest and tax during this timeframe. The decline, while not precipitous, warrants attention.

Further Decline & Initial Recovery (Feb 28, 2022 – May 31, 2023)

The ratio continued to decline through February 28, 2022, reaching a low of 3.78. A subsequent recovery began, with the ratio increasing to 3.60 by May 31, 2023. However, this recovery was modest and did not fully offset the earlier declines. The negative EBIT value in November 2021 significantly impacted the ratio during this period.

Stabilization & Improvement (Aug 31, 2023 – Feb 28, 2026)

From August 31, 2023, the interest coverage ratio exhibited a more consistent upward trend, reaching 5.43 by February 28, 2026. This indicates a strengthening ability to cover interest expense. The ratio stabilized in the range of 4.34 to 5.51 over the last eight quarters of the analyzed period. This suggests improved profitability relative to interest obligations.

Interest expense generally increased throughout the period, but the growth in earnings before interest and tax in the later quarters outpaced the increase in interest expense, driving the improvement in the interest coverage ratio. The fluctuations highlight the sensitivity of this ratio to changes in both profitability and financing costs.