EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Oracle Corp., economic profit calculation

US$ in millions

12 months ended:	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Net operating profit after taxes (NOPAT)¹	11,940)	10,160)	7,492)	14,348)	10,144)	10,943)
Cost of capital²	12.02%	11.70%	10.75%	10.54%	10.20%	11.17%
Invested capital³	101,930)	98,251)	77,262)	81,745)	87,978)	72,089)

Economic profit⁴	(314)	(1,338)	(813)	5,731)	1,166)	2,894)

Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 11,940 – 12.02% × 101,930 = -314

Download chart

Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Oracle Corp. economic profit decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Oracle Corp., NOPAT calculation

US$ in millions

12 months ended:	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Net income	10,467)	8,503)	6,717)	13,746)	10,135)	11,083)
Deferred income tax expense (benefit)¹	(2,139)	(2,167)	(1,146)	(2,425)	(851)	(1,191)
Increase (decrease) in allowances for credit losses²	57)	66)	(11)	(36)	38)	1)
Increase (decrease) in deferred revenues³	608)	828)	(344)	855)	(444)	77)
Increase (decrease) in restructuring plans accrued⁴	37)	68)	(94)	74)	(111)	(20)
Increase (decrease) in equity equivalents⁵	(1,437)	(1,205)	(1,595)	(1,532)	(1,368)	(1,133)
Interest expense	3,514)	3,505)	2,755)	2,496)	1,995)	2,082)
Interest expense, operating lease liability⁶	385)	194)	106)	78)	67)	74)
Adjusted interest expense	3,899)	3,699)	2,861)	2,574)	2,062)	2,156)
Tax benefit of interest expense⁷	(819)	(777)	(601)	(541)	(433)	(453)
Adjusted interest expense, after taxes⁸	3,080)	2,922)	2,260)	2,033)	1,629)	1,704)
Interest income	(451)	(285)	(94)	(101)	(527)	(1,092)
Investment income, before taxes	(451)	(285)	(94)	(101)	(527)	(1,092)
Tax expense (benefit) of investment income⁹	95)	60)	20)	21)	111)	229)
Investment income, after taxes¹⁰	(356)	(225)	(74)	(80)	(416)	(863)
Net income (loss) attributable to noncontrolling interest	186)	165)	184)	180)	164)	152)
Net operating profit after taxes (NOPAT)	11,940)	10,160)	7,492)	14,348)	10,144)	10,943)

Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowances for credit losses.

³ Addition of increase (decrease) in deferred revenues.

⁴ Addition of increase (decrease) in restructuring plans accrued.

⁵ Addition of increase (decrease) in equity equivalents to net income.

⁶ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 7,545 × 5.10% = 385

⁷ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 3,899 × 21.00% = 819

⁸ Addition of after taxes interest expense to net income.

⁹ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 451 × 21.00% = 95

¹⁰ Elimination of after taxes investment income.

Download chart

Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Oracle Corp. NOPAT increased from 2022 to 2023 and from 2023 to 2024.

Oracle Corp., cash operating taxes calculation

US$ in millions

12 months ended:	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Provision for (benefit from) income taxes	1,274)	623)	932)	(747)	1,928)	1,185)
Less: Deferred income tax expense (benefit)	(2,139)	(2,167)	(1,146)	(2,425)	(851)	(1,191)
Add: Tax savings from interest expense	819)	777)	601)	541)	433)	453)
Less: Tax imposed on investment income	95)	60)	20)	21)	111)	229)
Cash operating taxes	4,137)	3,507)	2,659)	2,197)	3,101)	2,600)

Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).

Download chart

Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Oracle Corp. cash operating taxes increased from 2022 to 2023 and from 2023 to 2024.

Oracle Corp., invested capital calculation (financing approach)

US$ in millions

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Notes payable and other borrowings, current	10,605)	4,061)	3,749)	8,250)	2,371)	4,494)
Notes payable and other borrowings, non-current	76,264)	86,420)	72,110)	75,995)	69,226)	51,673)
Operating lease liability¹	7,545)	4,849)	3,658)	2,782)	2,098)	2,158)
Total reported debt & leases	94,414)	95,330)	79,517)	87,027)	73,695)	58,325)
Total Oracle Corporation stockholders’ equity (deficit)	8,704)	1,073)	(6,220)	5,238)	12,074)	21,785)
Net deferred tax (assets) liabilities²	(8,581)	(6,454)	(6,751)	(5,772)	(3,211)	(2,432)
Allowances for credit losses³	485)	428)	362)	373)	409)	371)
Deferred revenues⁴	10,546)	9,938)	9,110)	9,454)	8,599)	9,043)
Restructuring plans accrued⁵	236)	199)	131)	225)	151)	262)
Equity equivalents⁶	2,686)	4,111)	2,852)	4,280)	5,948)	7,244)
Accumulated other comprehensive (income) loss, net of tax⁷	1,432)	1,522)	1,692)	1,175)	1,716)	1,628)
Noncontrolling interests	535)	483)	452)	714)	643)	578)
Adjusted total Oracle Corporation stockholders’ equity (deficit)	13,357)	7,189)	(1,224)	11,407)	20,381)	31,235)
Construction in progress⁸	(5,634)	(3,846)	(512)	(233)	(280)	(158)
Marketable securities⁹	(207)	(422)	(519)	(16,456)	(5,818)	(17,313)
Invested capital	101,930)	98,251)	77,262)	81,745)	87,978)	72,089)

Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of deferred revenues.

⁵ Addition of restructuring plans accrued.

⁶ Addition of equity equivalents to total Oracle Corporation stockholders’ equity (deficit).

⁷ Removal of accumulated other comprehensive income.

⁸ Subtraction of construction in progress.

⁹ Subtraction of marketable securities.

Download chart

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Oracle Corp. invested capital increased from 2022 to 2023 and from 2023 to 2024.

Oracle Corp., cost of capital calculations

May 31, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	393,840)	393,840)	÷	478,986)	=	0.82	0.82	×	13.90%	=	11.43%
Borrowings³	77,601)	77,601)	÷	478,986)	=	0.16	0.16	×	4.13% × (1 – 21.00%)	=	0.53%
Operating lease liability⁴	7,545)	7,545)	÷	478,986)	=	0.02	0.02	×	5.10% × (1 – 21.00%)	=	0.06%
Total:	478,986)					1.00					12.02%

Based on: 10-K (reporting date: 2024-05-31).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

May 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	331,248)	331,248)	÷	416,560)	=	0.80	0.80	×	13.90%	=	11.05%
Borrowings³	80,463)	80,463)	÷	416,560)	=	0.19	0.19	×	4.01% × (1 – 21.00%)	=	0.61%
Operating lease liability⁴	4,849)	4,849)	÷	416,560)	=	0.01	0.01	×	4.00% × (1 – 21.00%)	=	0.04%
Total:	416,560)					1.00					11.70%

Based on: 10-K (reporting date: 2023-05-31).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

May 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	180,362)	180,362)	÷	251,133)	=	0.72	0.72	×	13.90%	=	9.98%
Borrowings³	67,113)	67,113)	÷	251,133)	=	0.27	0.27	×	3.47% × (1 – 21.00%)	=	0.73%
Operating lease liability⁴	3,658)	3,658)	÷	251,133)	=	0.01	0.01	×	2.90% × (1 – 21.00%)	=	0.03%
Total:	251,133)					1.00					10.75%

Based on: 10-K (reporting date: 2022-05-31).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

May 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	217,748)	217,748)	÷	310,243)	=	0.70	0.70	×	13.90%	=	9.76%
Borrowings³	89,713)	89,713)	÷	310,243)	=	0.29	0.29	×	3.35% × (1 – 21.00%)	=	0.77%
Operating lease liability⁴	2,782)	2,782)	÷	310,243)	=	0.01	0.01	×	2.80% × (1 – 21.00%)	=	0.02%
Total:	310,243)					1.00					10.54%

Based on: 10-K (reporting date: 2021-05-31).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

May 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	169,146)	169,146)	÷	252,257)	=	0.67	0.67	×	13.90%	=	9.32%
Borrowings³	81,013)	81,013)	÷	252,257)	=	0.32	0.32	×	3.40% × (1 – 21.00%)	=	0.86%
Operating lease liability⁴	2,098)	2,098)	÷	252,257)	=	0.01	0.01	×	3.20% × (1 – 21.00%)	=	0.02%
Total:	252,257)					1.00					10.20%

Based on: 10-K (reporting date: 2020-05-31).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

May 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	187,206)	187,206)	÷	247,877)	=	0.76	0.76	×	13.90%	=	10.50%
Borrowings³	58,513)	58,513)	÷	247,877)	=	0.24	0.24	×	3.45% × (1 – 21.00%)	=	0.64%
Operating lease liability⁴	2,158)	2,158)	÷	247,877)	=	0.01	0.01	×	3.45% × (1 – 21.00%)	=	0.02%
Total:	247,877)					1.00					11.17%

Based on: 10-K (reporting date: 2019-05-31).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Oracle Corp., economic spread ratio calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(314)	(1,338)	(813)	5,731)	1,166)	2,894)
Invested capital²	101,930)	98,251)	77,262)	81,745)	87,978)	72,089)
Performance Ratio
Economic spread ratio³	-0.31%	-1.36%	-1.05%	7.01%	1.33%	4.01%
Benchmarks
Economic Spread Ratio, Competitors⁴
Accenture PLC	4.84%	5.63%	8.48%	10.32%	10.88%	9.61%
Adobe Inc.	—	5.20%	10.64%	13.05%	5.32%	3.43%
Autodesk Inc.	-10.63%	1.73%	-2.84%	-3.00%	4.64%	-16.38%
Cadence Design Systems Inc.	—	10.41%	9.79%	10.02%	10.82%	5.30%
CrowdStrike Holdings Inc.	-2.67%	0.98%	-2.28%	-4.55%	6.33%	—
International Business Machines Corp.	—	-1.57%	-9.42%	-4.43%	-4.15%	-0.43%
Intuit Inc.	-4.40%	-6.46%	-5.39%	2.34%	5.68%	19.34%
Microsoft Corp.	13.03%	16.07%	24.02%	33.03%	31.05%	26.17%
Palo Alto Networks Inc.	8.56%	14.57%	6.43%	-2.25%	-3.27%	-0.05%
Salesforce Inc.	-10.04%	-12.32%	-9.89%	-7.59%	-10.63%	-6.61%
ServiceNow Inc.	—	8.74%	4.20%	5.41%	7.04%	6.45%
Synopsys Inc.	—	-3.88%	2.70%	-3.32%	-3.14%	-6.13%

Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -314 ÷ 101,930 = -0.31%

⁴ Click competitor name to see calculations.

Download chart

Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Oracle Corp. economic spread ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Oracle Corp., economic profit margin calculation, comparison to benchmarks

	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(314)	(1,338)	(813)	5,731)	1,166)	2,894)

Revenues	52,961)	49,954)	42,440)	40,479)	39,068)	39,506)
Add: Increase (decrease) in deferred revenues	608)	828)	(344)	855)	(444)	77)
Adjusted revenues	53,569)	50,782)	42,096)	41,334)	38,624)	39,583)
Performance Ratio
Economic profit margin²	-0.59%	-2.63%	-1.93%	13.86%	3.02%	7.31%
Benchmarks
Economic Profit Margin, Competitors³
Accenture PLC	2.74%	2.90%	4.08%	5.29%	5.54%	4.44%
Adobe Inc.	—	6.51%	12.39%	16.26%	7.63%	5.15%
Autodesk Inc.	-15.03%	2.21%	-4.02%	-4.14%	6.13%	-26.70%
Cadence Design Systems Inc.	—	10.37%	9.77%	10.18%	10.90%	5.14%
CrowdStrike Holdings Inc.	-4.20%	1.31%	-3.56%	-9.45%	5.56%	—
International Business Machines Corp.	—	-2.79%	-16.36%	-8.44%	-7.22%	-0.73%
Intuit Inc.	-6.76%	-10.58%	-10.38%	2.96%	6.39%	12.88%
Microsoft Corp.	18.22%	18.30%	23.02%	27.42%	23.05%	19.36%
Palo Alto Networks Inc.	9.08%	14.47%	7.50%	-3.03%	-5.30%	-0.06%
Salesforce Inc.	-23.22%	-31.38%	-27.46%	-17.40%	-26.15%	-13.01%
ServiceNow Inc.	—	7.03%	3.38%	4.68%	5.74%	4.72%
Synopsys Inc.	—	-5.47%	3.81%	-5.28%	-5.39%	-10.59%

Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × -314 ÷ 53,569 = -0.59%

³ Click competitor name to see calculations.

Download chart

Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Oracle Corp. economic profit margin deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Oracle Corp. (NYSE:ORCL)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin