Oracle Corp. (NYSE:ORCL)

Debt to Equity Ratio

The debt to equity ratio demonstrates a generally upward trend from August 2019, starting at 2.95 and peaking at 16.08 by May 2021. This sharp increase indicates a substantial rise in debt relative to equity during this period. Following this peak, there is a gap in data, after which the ratio spikes significantly to 84.33 in November 2023, before gradually declining to 3.78 by August 2025. The pattern suggests volatility with high leverage peaks followed by a deleveraging phase.

Debt to Capital Ratio

This ratio increases steadily from 0.75 in August 2019 to a peak of 1.15 in November 2021, implying increasing debt as a proportion of total capital. After November 2021, the ratio declines continuously, reaching 0.79 by August 2025. The initial rise followed by a gradual decrease indicates a transition from higher to more conservative capital structures.

Debt to Assets Ratio

The debt to assets ratio shows a gradual increase from 0.51 in August 2019 to around 0.73 in November 2021, reflecting a growing share of debt financing in relation to total assets. Post-November 2021, a slight downward trend is observed, with the ratio decreasing to 0.51 by August 2025, suggesting a reduction in financial risk as the company's reliance on debt decreases relative to its asset base.

Financial Leverage

Financial leverage increased markedly from 5.76 in August 2019 to 25.03 by May 2021, indicating increased use of debt financing. After a data gap, leverage spikes dramatically to 125.24 in November 2023, followed by a steady decline to 7.47 by August 2025. This behavior implies periods of aggressive borrowing partially reversed by later deleveraging efforts.

Interest Coverage Ratio

The interest coverage ratio is first available from February 2020 at 7.05 and experiences a gradual decline to 3.33 by August 2022, indicating decreasing ability to cover interest expenses from operating earnings. From August 2022 onwards, the ratio fluctuates within a modestly improving range, ending near 4.94 by August 2025, suggesting some recovery in earnings relative to interest obligations but still lower compared to initial levels in early 2020.

The analysis of the financial data reveals significant fluctuations in the total debt, stockholders' equity, and the debt-to-equity ratio over the periods observed.

Total Debt

The total debt shows a general increasing trend from August 2019 to May 2025, starting at approximately $54.4 billion and rising to roughly $91.3 billion. There is a notable spike between February 2020 and May 2020, where debt jumped from about $51.7 billion to $71.6 billion. Subsequently, the debt levels fluctuate but remain elevated, with minor declines observed in some quarters. The highest recorded debt appears around February 2023, reaching around $91.8 billion, followed by some reduction but maintaining a high level above $83 billion towards the latter periods.

Total Stockholders’ Equity

The stockholders' equity demonstrates a declining trend from August 2019 through November 2021, beginning at $18.4 billion and falling to a negative value, bottoming at approximately -$10.1 billion. This negative equity condition persists with fluctuations until around May 2023, after which a recovery trend emerges. From May 2023 onward, the equity increases steadily, turning positive and reaching about $24.2 billion by August 2025. This shift from negative to positive equity indicates an improvement in the company’s net asset position during the latter periods.

Debt to Equity Ratio

The debt-to-equity ratio reflects the interaction of the trends in debt and equity. Initially, the ratio rises sharply from 2.95 in August 2019 to a peak of 16.08 by May 2021, corresponding with increasing debt and declining or negative equity. Ratios are not reported for several quarters where equity is negative or not available, indicating possible issues in calculation or interpretation. Following this peak, the ratio spikes dramatically to 84.33 by November 2022, likely due to very low equity levels. Subsequently, as equity recovers, the ratio decreases substantially to 3.78 by May 2025, suggesting a restoration of balance between debt and equity.

Overall, the financial data denote a period of financial stress characterized by rising debt and deteriorating equity until early 2023, followed by a phase of recovery where equity improves significantly and debt levels stabilize or decline slightly. The debt-to-equity ratio corroborates these dynamics, initially indicating high leverage risk and subsequently showing improvement as equity strengthens.

The financial data reveals notable trends in the company's debt structure and capital composition over the observed periods.

Total Debt

The total debt fluctuates significantly throughout the timeframe. Initially, the debt decreases slightly from approximately 54,440 million USD in August 2019 to around 51,669 million USD by November 2019, remaining relatively stable through February 2020. Subsequently, there is a substantial increase in May 2020, reaching about 71,597 million USD. After this spike, debt levels show variability, peaking above 91,000 million USD in August 2022 and February 2023. Following these peaks, a general decline trend is observable toward 91,315 million USD in August 2025. Overall, debt levels demonstrate cyclical patterns with periods of considerable increase followed by gradual decreases.

Total Capital

Total capital trends parallel those of total debt to some extent but show a more consistent upward movement. From an initial value of roughly 72,873 million USD in August 2019, total capital experiences a decline until early 2021, reaching lows near 68,330 million USD in November 2021. Subsequently, capital rises steadily, reaching approximately 115,469 million USD by August 2025. This pattern suggests reinvestment or capital accumulation over the latter part of the period, contributing to a stronger capital base.

Debt to Capital Ratio

The debt-to-capital ratio provides insight into the leverage dynamics of the company. Starting at 0.75 in August 2019, this ratio progressively increases, surpassing the 1.0 threshold by August 2021, indicating that debt exceeded total capital during this phase. The ratio peaks at 1.15 in November 2021, reflecting heightened financial leverage. After this peak, the ratio declines steadily, reaching 0.79 by August 2025, which implies a reduction in leverage and potentially improved financial stability. The downward trend in the latter periods aligns with the observed increase in total capital and slight reduction in total debt.

In summary, the company experienced a period of increasing leverage through 2021, marked by rising debt exceeding capital. However, subsequent periods show a strategic movement towards deleveraging, accompanied by a growth in capital, which may indicate efforts to strengthen the balance sheet and reduce financial risk.

The analysis of the quarterly financial data reveals discernible trends in the company's debt, assets, and leverage ratios over the specified periods.

Total Debt

The total debt exhibits fluctuations with an initial decrease from approximately $54,440 million in August 2019 to about $51,669 million in November 2019. Subsequently, there is a significant increase around May 2020, peaking near $84,245 million in May 2021. Following this peak, the debt level shows a general downward trend with some intermittent rises, declining to approximately $91,315 million by August 2025. This pattern suggests periods of leveraged expansion followed by gradual deleveraging efforts.

Total Assets

Total assets display an overall upward trend throughout the periods analyzed. Beginning at around $106,229 million in August 2019, assets dip slightly towards late 2019 and early 2020 but then increase steadily, reaching approximately $180,449 million by August 2025. This growth indicates an expansion in the company's asset base, reflecting possibly growth initiatives, acquisitions, or increases in operational capacity.

Debt to Assets Ratio

The debt to assets ratio, representing the company's leverage, starts at 0.51 in August 2019 and increases to a peak near 0.73 in November 2021. After this peak, the ratio gradually declines, falling to about 0.51 by August 2025. The initial increase signifies rising leverage, possibly due to increased borrowing relative to asset growth, followed by a phase of deleveraging where asset growth outpaces debt increases or absolute reductions in debt.

In summary, the data indicate a cycle of increasing indebtedness and leverage up to late 2021, accompanied by asset growth. Post-2021, there is a noticeable shift towards reducing leverage and stabilizing debt levels, while the asset base continues to expand steadily. This suggests a strategic focus on strengthening the balance sheet and improving financial stability over the longer term.

The analysis of the quarterly financial data reveals several key trends and notable fluctuations over the periods presented.

Total assets

The total assets exhibit a generally upward trajectory over the timeframe. Beginning at approximately $106.2 billion, assets experienced some volatility, declining to around $96.7 billion by early 2020 before a significant rebound and growth phase starting mid-2020. From May 2020 onwards, total assets increased steadily, reaching a high of approximately $180.4 billion by August 2025. This long-term growth suggests expansion and asset accumulation despite intermittent periods of declines.

Total Oracle Corporation stockholders’ equity (deficit)

Shareholders’ equity shows a contrasting and more volatile pattern compared to total assets. Starting at about $18.4 billion, equity declined sharply through mid-2021, falling into negative territory around August 2021 and continuing a negative trend until early 2023. This indicates periods of net deficits, potentially caused by losses, significant liabilities, or equity reductions. However, equity recovered thereafter, returning to positive figures by May 2023 and increasing continuously to $24.2 billion by August 2025. The recovery phase implies improvements in retained earnings or reduction in liabilities, restoring the company’s net worth.

Financial leverage

The financial leverage ratio, calculated as total assets divided by stockholders' equity, reveals significant volatility reflective of the movements in equity. Initially, leverage increased steadily from 5.76 to approximately 13.9 through late 2020, then spiked dramatically to very high levels, peaking at 125.24 in May 2023. This spike corresponds with the period of negative equity, indicating a high level of indebtedness relative to shareholder capital. Following this peak, leverage gradually decreased, settling around 7.47 by August 2025. The decline in leverage during the latter periods reflects the equity recovery and more balanced capital structure.

Overall, the data depicts a company undergoing a phase of asset growth combined with significant fluctuations in equity, causing wide swings in financial leverage. Initially stable, the equity situation deteriorated sharply before recovering strongly, which influenced the leverage dynamics. The stabilizing trend toward increasing equity and reduced leverage in the most recent quarters may suggest enhanced financial health and a more sustainable capital structure going forward.

The earnings before interest and tax (EBIT) demonstrate notable fluctuations over the analyzed periods. Initially, from August 31, 2019, to May 31, 2021, EBIT shows a general upward trend, increasing from 2,976 million USD to a peak of 4,853 million USD. However, following May 31, 2021, the EBIT exhibits significant volatility. A pronounced dip occurs in November 30, 2021, with a negative value of -817 million USD, indicating an unusual financial disturbance or accounting adjustment during that quarter.

Subsequent to this sharp decline, EBIT recovers swiftly, climbing back above 3,500 million USD in February 28, 2022, and maintaining a generally positive trajectory with some moderate fluctuations. Towards the end of the timeline, especially from May 31, 2024, to August 31, 2025, EBIT stabilizes at higher levels between approximately 4,000 and 5,131 million USD, suggesting improved operating performance or effective cost management during these periods.

Interest expense remains relatively stable but shows a gradual upward trend across the periods. Starting from 494 million USD at August 31, 2019, the interest cost generally increases to values around 900 million USD in the later periods, peaking at 978 million USD on May 31, 2025. This rise in interest expenses could be indicative of increased borrowing or changes in interest rates impacting the cost of debt financing.

The interest coverage ratio, which measures the company’s ability to pay interest expenses from EBIT, presents a declining trend from a high of about 7.05 in February 29, 2020, down to lower ranges around 3.33 to 3.78 through 2021 and early 2022. This decline highlights increasing pressure on operational earnings relative to interest obligations during that timeframe.

After this period of reduced coverage, a gradual recovery is observed. From mid-2022 onwards, the interest coverage ratio increases steadily, reaching approximately 4.94 by late 2024 and maintaining this level into early 2025. This improvement indicates a strengthening capacity to meet interest expenses from operating earnings, likely supported by the recovery and growth in EBIT seen in the corresponding periods.

Overall, the data reveal a cycle of strong performance, a short-term disruption marked by negative EBIT and reduced coverage, followed by recovery and stabilization of earnings and interest coverage. Rising interest expenses suggest increased leverage or borrowing costs, necessitating continuous focus on EBIT growth to sustain healthy interest coverage ratios.