Oracle Corp. (NYSE:ORCL)

The analysis of the financial ratios and periods reveals several notable trends in the company's operational efficiency over the observed quarters.

Receivables Turnover

The receivables turnover ratio demonstrates a generally declining trend from 8.57 in August 2020 to 6.67 in August 2025, indicating a gradual slowdown in the rate at which receivables are collected. Peaks and troughs are observed, with a high point near 9.28 in November 2021 and a low around 6.67 in the latter periods, suggesting increased difficulty in collecting receivables or extending credit terms over time.

Payables Turnover

Payables turnover shows considerable volatility, starting at 14.72 in August 2020 and declining to a low of 2.18 by November 2025. Several fluctuations occur, including a sharp decrease towards 2.18 in the final period, reflecting a substantial elongation in the time taken to pay suppliers. The lower the turnover ratio, the longer the payables payment period, implying the company is taking more time to settle its payables, which may influence supplier relationships or cash flow strategy.

Working Capital Turnover

Working capital turnover exhibits an initial increase from 1.26 in August 2020 to a peak of 3.86 in February 2022, followed by incomplete data in subsequent quarters. An exceptionally high ratio of 113.15 appears in August 2025, which may indicate an outlier or a significant change in working capital management or reporting. This metric represents how efficiently the company uses its working capital to generate sales, with higher values indicating better efficiency, but such extreme values require careful interpretation.

Average Receivable Collection Period

The average collection period fluctuates between 39 and 55 days, starting near 43 days in August 2020 and rising to around 55 days by August 2025. This gradual increase corresponds to the trend in receivables turnover and implies a lengthening collection cycle, potentially impacting liquidity.

Average Payables Payment Period

The average payment period shows a significant upward trend, extending from 25 days in August 2020 to a striking 167 days by November 2025. Periods of relative stability and increase are observed, but the overall pattern indicates a growing delay in payments to creditors. This extended payment period could be a strategic move to preserve cash or reflect slower processing of payables but might also affect supplier relationships negatively.

In summary, the company’s liquidity management points to a lengthening in both receivables and payables periods over time, affecting working capital turnover efficiency. The declining receivables turnover coupled with extended collection periods may signal challenges in cash collections, while the decreasing payables turnover and prolonged payment periods indicate longer cash outflows management. The sharp variation in working capital turnover near the end of the timeline should be further examined to understand its implications.

Revenues

Revenues demonstrate a generally increasing trend over the observed periods. Starting at 9,367 million US dollars in August 2020, revenues rose to a peak of 15,903 million in August 2025. Some fluctuations occurred, such as a decline from 11,227 million in May 2021 to 9,728 million in August 2021, and from 13,836 million in May 2023 to 12,453 million in August 2023. However, the overall trajectory remains upward, signifying growth in the company’s sales and market activity over the five-year span.

Trade Receivables, Net of Allowances for Credit Losses

Trade receivables increased steadily from 4,576 million US dollars in August 2020 to 8,843 million in August 2025. There were slight declines and stabilization periods, such as between May 2022 and August 2022 and around November 2024 to May 2025, but the broader pattern is a clear rise. This suggests increasing credit extended to customers and potentially higher sales made on credit terms.

Receivables Turnover Ratio

The receivables turnover ratio exhibited some volatility but generally declined over time. From 8.57 in August 2020, the ratio decreased to around 6.67 by August 2025. This indicates that the frequency with which receivables are collected has slowed down, possibly pointing to lengthening collection periods or changes in credit policies. Notably, periods with lower turnover ratios correspond to times when trade receivables were increasing notably, reinforcing this interpretation.

Overall Analysis

The company’s revenue growth has been consistent, but the increasing trade receivables combined with a declining receivables turnover ratio could indicate a gradual loosening of credit terms or challenges in collections. This trend may warrant closer monitoring to manage cash flow effectively and avoid potential liquidity issues. Continuous revenue growth is positive, but the receivables dynamics suggest that operational efficiency in managing credit and collections might need attention to sustain financial health.

The cost of revenues demonstrates a generally upward trend over the observed periods, starting from 1,880 million USD and reaching 4,884 million USD by the end of the timeline. Despite some fluctuations, the trajectory indicates increasing costs associated with generating revenue, which may reflect business growth, inflationary effects, or increased operational expenses.

Accounts payable also experiences a significant increase, rising from 534 million USD to 8,203 million USD. This growth is relatively more pronounced and exhibits periods of sharp acceleration, particularly in the later periods. The increase in accounts payable suggests the company is extending its payment obligations, possibly to manage cash flow or capitalize on supplier credit terms.

The payables turnover ratio declines markedly from an initial value of 14.72 to 2.18 by the final period. This ratio measures how many times the company pays off its accounts payable during a period. A decreasing ratio indicates slower payment to suppliers and a lengthening of payment terms. The decline may imply a strategic shift towards using vendor financing or a response to cash management pressures.

Overall, there is a consistent pattern of rising cost of revenues and accounts payable accompanied by a declining payables turnover ratio. This suggests that as operational costs have increased, the company is increasingly deferring payments to suppliers, extending its account payable period. While this can enhance liquidity in the short term, it may also indicate potential stress in supplier relationships or a need to balance cash outflows amid rising costs.

The financial data reveals several notable trends and fluctuations over the examined quarters. Working capital, expressed in millions of US dollars, exhibits pronounced volatility. Starting from a positive working capital of 31,191 million at the beginning of the period, there is a general decline with intermittent recoveries until it turns negative in August 2022, reaching as low as -13,815 million. The negative values persist with some moderation but remain below zero through the later quarters, indicating potential liquidity pressures or changes in the asset-liability management strategy.

Revenues demonstrate an overall upward trajectory with some fluctuations. Beginning at 9,367 million in August 2020, revenues increase consistently with minor dips, reaching a peak of 15,903 million in August 2025. Despite some quarter-to-quarter variability, the long-term trend suggests growth in business activity or sales performance.

The working capital turnover ratio highlights the efficiency with which working capital is used to generate revenues. Initially fluctuating between about 1.26 and 3.86 in the early periods, there is a gap in the data during the quarters with negative working capital values. Toward the most recent quarters, a very high value of 113.15 is recorded, suggesting an unusual or potentially distorted measure that may be influenced by the near-zero or negative working capital denominator. This outlier calls for cautious interpretation as it could indicate a sharp increase in revenue efficiency or an artifact of the altered working capital position.

Working Capital Trends

Started positive but trended downward significantly over time, turning negative from mid-2022 onward, which may reflect changes in current asset or liability management.

Revenue Trends

Displayed steady growth across the periods, emphasizing expanding business or enhanced sales, despite some temporary declines.

Working Capital Turnover

Early periods show moderate usage efficiency of working capital to revenue; however, negative working capital complicates this metric, culminating in an abnormally high and potentially misleading value in the latest quarter.

In conclusion, the key insights include a considerable decline and sustained negative working capital in recent quarters alongside consistent revenue growth. The working capital turnover ratio's reliability is challenged in the context of negative working capital, indicating the need for alternative liquidity and operational efficiency metrics to obtain a clearer view of financial health.

The analysis of the quarterly financial ratios reveals distinct trends in the receivables management performance over the observed periods.

Receivables Turnover Ratio

This ratio demonstrates fluctuations with an overall declining trend in recent quarters. The ratio started around 8.57–8.91 in the early periods, indicating relatively efficient collection. It reached peaks above 9 in late 2020 and early 2021, reflecting improved turnover. However, from mid-2021 onward, the ratio generally decreased, dropping below 7.0 in the latest quarters, with the lowest values around 6.67–6.73. This decline indicates a slower turnover rate and a potential reduction in collection efficiency.

Average Receivable Collection Period

The collection period, expressed in days, inversely correlates with the turnover ratio, showing a lengthening trend over time. Initially, the period was around 39 to 43 days, reflecting prompt collection. Mid-2021 saw a spike to values above 50 days, indicating slower collections or longer credit terms. Subsequently, the period remained elevated, fluctuating between 47 and 55 days in the most recent quarters, suggesting a sustained extension in the time taken to collect receivables.

Overall, the combined analysis of the receivables turnover and collection period suggests a weakening in receivables performance. The company appears to be experiencing slower cash inflows from customers, with potential implications for liquidity management. It would be advisable to investigate underlying causes such as changes in credit policy, customer payment behavior, or sales mix to address these trends effectively.

The payables turnover ratio and the average payables payment period display inverse but related trends over the observed timeframe.

Payables Turnover Ratio

The payables turnover ratio starts at a high level of 14.72 in August 2020 and then exhibits a significant downward trend through to November 2022, declining to a low of 6.68. This decline suggests the company was taking longer to pay its suppliers during this period. A notable exception occurs in November 2022 and early 2023, when the ratio rises sharply to 13.67 and remains relatively elevated above 11 into early 2023, indicating faster payment activity. However, from mid-2023 onwards, the ratio declines steadily again, reaching extremely low levels of 3.31 and 2.18 by mid and late 2025, which implies a substantial slowdown in the rate at which payables are turned over during those latest periods.

Average Payables Payment Period (Days)

The average payables payment period moves inversely to the turnover ratio, beginning at a relatively short duration of 25 days in August 2020, then generally increasing through the end of 2022, peaking around 55 days on multiple occasions which aligns with the reduction in turnover ratio. A temporary reduction in the payment period occurs near the end of 2022 and into early 2023, with payment days dropping to approximately 27, consistent with the increase in payables turnover during the same interval. After this period, the payment duration increases consistently, eventually reaching 110 days in August 2025 and rising further to 167 days by the end of the dataset. These figures suggest the company increasingly delays payments, possibly as a cash management strategy or due to liquidity pressures.

Overall Observations

The trends indicate a shift toward extended payment terms over time, with a brief interlude of quicker payments at the turn of 2022 to 2023. The prolonged payment periods in the latest quarters raise concerns about the company's ability or willingness to settle obligations promptly, which could impact supplier relationships or reflect broader financial strategy considerations. The sharp reduction in the payables turnover ratio towards the end of the period is particularly notable, representing a significant change in working capital management.