Oracle: Financial Analysis

Paper Summary:

Oracle sells software for database management and network products, application development productivity tools, and end-user applications. This paper provides an introduction to the company, mentions its bid to purchase the company, PeopleSoft, and then presents a financial analysis of the company.

Paper Outline:
Introduction
Long Term Debt Ratio (Long Term Liabilities/Total Assets)
Current Ratio (Current Assets/Current Liabilities)
Fixed Assets Turnover (Sales/Average Fixed Assets)
Total Asset Turnover (Sales/Average Total Assets)
Return On Equity
Conclusion
Bibliography

From the Paper:

"It would seem that Oracle's Long Term Debt Ratio is improving, as in May '04 only 3.423% of the total assets was financed by debt, compared to 4.805% in May '02. The financial risk is steadily decreasing, which indicates a good risk management of the company. However, for a complete analysis, one must take into consideration the value of the interest ratio paid to creditors, the amount of dividends paid to shareholders and when the long term loans are due. One may find that financing the assets based on Long Term Debt is "cheaper" than doing in based on Shareholders' Equity."

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