997 it was 49%, in 1998 it was 47%, in 1999 it was 46%, and in 2000 it was 48%. This is showing a trend of increasing debt, but not a strong trend. It would appear that they are maintaining just under half of their total assets being financed by credit. There was no industry average, which we could find, to compare this statistic with (Oracle Corporation, 2000b).The Debt-to-Equity ratio tells us how much of their activities are funded by debt and is calculated by taking total debt and dividing it by total equity. In 1998, Oracle’s debt-to-equity ratio was 10.2%, in 1999 it was 8.2%, and currently in 2000 it is 5%, which indicates a strong trend down. These are very positive numbers; it indicates that Oracle is reducing its amount of funds it finances its activities, like projects, with. This will make them look good in the eyes of creditors if they would decide to borrow money to finance anything. Profitability RatiosThe next group of ratios is called Profitability Ratios and they let an analyst know how effective a company is making its investment and financing decisions. The first one is the Gross profit margin, which is equated by taking the sales minus the cost of sales and dividing the sum by sales (Moyer, McGuigan, Kretlow 1999,80). Oracle’s is currently 70.95%, which is very good. But when compared to the industry average of 75.58%, it indicates that Oracle is behind when compared to the average company. Net profit margin measures how much profit a company earns from its sales after all expenses are deducted, including taxes and interest. It is calculated by simply taking a company’s earnings, after taxes are taken out, and dividing it by the sales number. Oracles net profit margin is 62.16%, which is very good, especially when it is compared to the industry average of 20.45%. The average net profit margin over the last five years for Oracle is 23.38% and compared to the industry five year average ...
