Stock Analysis on Net
Stock Analysis on Net

Oracle Corp. (NYSE:ORCL)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin 

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Oracle Corp., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
May 31, 2024 120.26% = 7.42% × 16.20
May 31, 2023 792.45% = 6.33% × 125.24
May 31, 2022 — = 6.15% × —
May 31, 2021 262.43% = 10.48% × 25.03
May 31, 2020 83.94% = 8.78% × 9.56
May 31, 2019 50.87% = 10.20% × 4.99

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).

The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in financial leverage ratio.

Three-Component Disaggregation of ROE

Oracle Corp., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
May 31, 2024 120.26% = 19.76% × 0.38 × 16.20
May 31, 2023 792.45% = 17.02% × 0.37 × 125.24
May 31, 2022 — = 15.83% × 0.39 × —
May 31, 2021 262.43% = 33.96% × 0.31 × 25.03
May 31, 2020 83.94% = 25.94% × 0.34 × 9.56
May 31, 2019 50.87% = 28.05% × 0.36 × 4.99

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).

The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in financial leverage ratio.

Five-Component Disaggregation of ROE

Oracle Corp., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
May 31, 2024 120.26% = 0.89 × 0.77 × 28.80% × 0.38 × 16.20
May 31, 2023 792.45% = 0.93 × 0.72 × 25.29% × 0.37 × 125.24
May 31, 2022 — = 0.88 × 0.74 × 24.51% × 0.39 × —
May 31, 2021 262.43% = 1.06 × 0.84 × 38.28% × 0.31 × 25.03
May 31, 2020 83.94% = 0.84 × 0.86 × 35.98% × 0.34 × 9.56
May 31, 2019 50.87% = 0.90 × 0.85 × 36.32% × 0.36 × 4.99

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).

The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in financial leverage ratio.

Two-Component Disaggregation of ROA

Oracle Corp., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
May 31, 2024 7.42% = 19.76% × 0.38
May 31, 2023 6.33% = 17.02% × 0.37
May 31, 2022 6.15% = 15.83% × 0.39
May 31, 2021 10.48% = 33.96% × 0.31
May 31, 2020 8.78% = 25.94% × 0.34
May 31, 2019 10.20% = 28.05% × 0.36

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).

The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Oracle Corp., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
May 31, 2024 7.42% = 0.89 × 0.77 × 28.80% × 0.38
May 31, 2023 6.33% = 0.93 × 0.72 × 25.29% × 0.37
May 31, 2022 6.15% = 0.88 × 0.74 × 24.51% × 0.39
May 31, 2021 10.48% = 1.06 × 0.84 × 38.28% × 0.31
May 31, 2020 8.78% = 0.84 × 0.86 × 35.98% × 0.34
May 31, 2019 10.20% = 0.90 × 0.85 × 36.32% × 0.36

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).

The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in operating profitability measured by EBIT margin ratio.

Disaggregation of Net Profit Margin

Oracle Corp., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
May 31, 2024 19.76% = 0.89 × 0.77 × 28.80%
May 31, 2023 17.02% = 0.93 × 0.72 × 25.29%
May 31, 2022 15.83% = 0.88 × 0.74 × 24.51%
May 31, 2021 33.96% = 1.06 × 0.84 × 38.28%
May 31, 2020 25.94% = 0.84 × 0.86 × 35.98%
May 31, 2019 28.05% = 0.90 × 0.85 × 36.32%

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).

The primary reason for the increase in net profit margin ratio over 2024 year is the increase in operating profitability measured by EBIT margin ratio.