quity. Oracle Corporation’s is currently at 131.71%, which is an extremely impressing percentage, especially when compared to the industry average of 4.6%. This is not only a positive indicator for Oracle’s profitability, but also indicates that their asset management and profit margins are working well to influence the profits of the company. Market-Based RatiosThe next ratio is the Profit-to-Earnings ratio, which is an indicator of potential growth of a company’s earnings. The P/E ratio is read the higher the P/E multiple, the higher the risk and the greater the growth potential. Oracle’s is currently 35.97 times and compared to the industry average of 39.25 indicates Oracle is a little behind in growth potential. This may indicate that Oracle is a lower risk than the average software and programming company, it has lower growth prospects than average, or both. It has, however, been steadily growing over the last five years, which is a good indicator for its future trends on the stock market (America Online, Inc., 2000).The Market-to-book ratio (P/BV) for Oracle Corporation is currently 149, high compared to the industry average of 4.72. The last five fiscal years averaged for Oracle is 54.24, and the industry’s is 29.78 (America Online, Inc., 2000). It is calculated by taking the market price per share and dividing it by the book value per share. The book value per share is formulated by taking total common stockholder’s equity and dividing it by outstanding shares (Moyer, McGuigan, Kretlow 1998, 83-4). This indicates that Oracles high P/BV is a trend and will continue to increase above the industry average Dividend PolicyThe dividend policy or Oracle Corporation will hopefully be an indicator in how and where they plan to grow and their strategies for their dividends (Moyer, McGuigan, Kretlow 1999, 83).The Payout Ratio is calculated by taking the dividend per share and dividing it by t...
