GURUFOCUS.COM » STOCK LIST » Technology » Software » Oracle Corp (NYSE:ORCL) » Definitions » ROIC %

ORCL (Oracle) ROIC % : 10.10% (As of Aug. 2024)


View and export this data going back to 1986. Start your Free Trial

What is Oracle ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Oracle's annualized return on invested capital (ROIC %) for the quarter that ended in Aug. 2024 was 10.10%.

As of today (2024-10-31), Oracle's WACC % is 11.22%. Oracle's ROIC % is 10.23% (calculated using TTM income statement data). Oracle earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Oracle ROIC % Historical Data

The historical data trend for Oracle's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Oracle ROIC % Chart

Oracle Annual Data
Trend May15 May16 May17 May18 May19 May20 May21 May22 May23 May24
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 14.89 18.67 14.27 11.10 10.13

Oracle Quarterly Data
Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24 May24 Aug24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 10.25 9.97 9.65 11.31 10.10

Competitive Comparison of Oracle's ROIC %

For the Software - Infrastructure subindustry, Oracle's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Oracle's ROIC % Distribution in the Software Industry

For the Software industry and Technology sector, Oracle's ROIC % distribution charts can be found below:

* The bar in red indicates where Oracle's ROIC % falls into.



Oracle ROIC % Calculation

Oracle's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in May. 2024 is calculated as:

ROIC % (A: May. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: May. 2023 ) + Invested Capital (A: May. 2024 ))/ count )
=16071 * ( 1 - 10.85% )/( (135266 + 147609)/ 2 )
=14327.2965/141437.5
=10.13 %

where

Oracle's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Aug. 2024 is calculated as:

ROIC % (Q: Aug. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: May. 2024 ) + Invested Capital (Q: Aug. 2024 ))/ count )
=16308 * ( 1 - 7.57% )/( (147609 + 150980)/ 2 )
=15073.4844/149294.5
=10.10 %

where

Note: The Operating Income data used here is four times the quarterly (Aug. 2024) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Oracle  (NYSE:ORCL) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Oracle's WACC % is 11.22%. Oracle's ROIC % is 10.23% (calculated using TTM income statement data).


Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


Oracle ROIC % Related Terms

Thank you for viewing the detailed overview of Oracle's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


Oracle Business Description

Address
2300 Oracle Way, Austin, TX, USA, 78741
Oracle provides database technology and enterprise resource planning, or ERP, software to enterprises around the world. Founded in 1977, Oracle pioneered the first commercial SQL-based relational database management system. Today, Oracle has 430,000 customers in 175 countries, supported by its base of 136,000 employees.
Executives
Maria Smith officer: EVP, Chief Accounting Officer C/O DELPHI ASSET MANAGEMENT CORP, 5525 KIETZKE LANE, SUITE 200, RENO NV 89511
Leon E Panetta director 3290 WEST BAYSHORE RD, PALO ALTO CA 94303
Lawrence Joseph Ellison director, 10 percent owner, officer: Chief Executive Officer C/O DELPHI ASSET MGMT CORPORATION, 5525 KIETZKE LANE, SUITE 200, RENO NV 89511
Edward Screven officer: Chief Corporate Architect C/O DELPHI ASSET MANAGEMENT CORP, 5525 KIETZKE LANE, SUITE 200, RENO NV 89511
Jeffrey Berg director C/O DELPHI ASSET MGMT. CORP, 5525 KIETZKE LANE, SUITE 200, RENO NV 89511
Michael J Boskin director C/O RIPPLEWOOD HOLDINGS LLC, ONE ROCKERFELLER PLAZA, NEW YORK NY 10020
George H Conrades director 500 TECHNOLOGY SQUARE, FIFTH FLOOR, CAMBRIDGE MA 02139
Safra Catz director, officer: President C/O DELPHI ASSET MGMT CORPORATION, 5525 KIETZKE LANE, SUITE 200, RENO NV 89511
Jeffrey Henley director, officer: Executive Vice Chairman C/O DELPHI ASSET MGMT. CORP, 5525 KIETZKE LANE, SUITE 200, RENO NV 89511
Naomi O Seligman director ONE DIAMOND HILL RD, MURRAY HILL NJ 07974
Rona Alison Fairhead director C/O INTERACTIVE DATA CORPORATION, 32 CROSBY DRIVE, BEDFORD MA 01730
Stuart Levey officer: EVP, Chief Legal Officer C/O DELPHI ASSET MANAGEMENT CORP, 5525 KIETZKE LANE, SUITE 200, RENO NV 89511
Renee Jo James director 2111 NE 25TH AVE, JF1-41, HILLSBORO OR 97124
Awo Ablo director C/O DELPHI ASSET MANAGEMENT, 5525 KIETZKE LANE, #200, RENO NV 89511
Charles W Moorman director DUKE ENERGY CORPORATION, 550 SOUTH TRYON STREET - DEC45A, CHARLOTTE NC 28202