The stability of Oracle Corporation (NYSE: ORCL) stock and its debt levels are complex issues influenced by various financial metrics and market perceptions. As of September 10, 2025, Oracle's financial health, particularly concerning its debt, shows a mixed but generally improving picture, especially when considering recent trends in its solvency ratios and equity [1].

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Oracle's debt levels have fluctuated but have generally been on an upward trajectory in absolute terms. As of May 2025, Oracle reported total debt of US$95.502 billion, an increase from US$71.597 billion in 2020 [1]. When including operating lease liabilities, the total debt reached US$108.952 billion in May 2025 [1]. Another source indicates Oracle had US$92.6 billion of debt as of May 2025, with net debt around US$81.4 billion after accounting for US$11.2 billion in cash [2]. This absolute increase in debt is a point of consideration for investors [2].

However, the more critical aspect is Oracle's ability to manage this debt, which is assessed through solvency and coverage ratios.

Solvency Ratios:

• Debt to Equity Ratio: This ratio shows significant volatility. It peaked dramatically at 84.33 in 2023, largely due to a period of negative stockholders' equity [1]. However, it has since sharply declined to 4.67 by May 2025, indicating a substantial reduction in financial leverage and an improved equity base [1]. The inclusion of operating lease liabilities shows a similar trend, decreasing to 5.33 in May 2025 [1]. This recovery from negative equity to a strong positive position (stockholders' equity reached US$20.451 billion in May 2025 from a deficit of US$6.220 billion in 2022) is a key indicator of strengthening financial stability [1].
• Debt to Capital Ratio: This ratio, which measures debt relative to total capital (debt plus equity), remained relatively stable with minor fluctuations. It peaked at 1.09 in 2022 but has since declined to 0.82 in May 2025 [1]. This downward trend suggests a relative improvement in Oracle's capitalization structure, with debt constituting a smaller proportion of total capital [1].
• Debt to Assets Ratio: This ratio exhibited moderate changes, peaking at 0.69 in 2022 and then trending downward to 0.57 in May 2025 [1]. This indicates an improvement in the company's leverage position relative to its asset base, with debt comprising a smaller portion of assets in recent years [1]. Total assets have shown significant growth, reaching US$168.361 billion in 2025, outpacing the growth in total debt, which contributes to the declining debt-to-assets ratio [1].

Coverage Ratios:

• Interest Coverage Ratio: This ratio, which measures the ability to cover interest expenses with operating earnings, showed a declining trend from 7.13 in 2020 to a low of 3.65 in 2023 [1]. However, there has been a gradual recovery post-2023, with the ratio improving to 5.01 by May 2025, indicating improved earnings relative to interest obligations [1]. Oracle's EBIT covered its interest expense 6.0 times as of May 2025 [2].
• Fixed Charge Coverage Ratio: Similar to interest coverage, this ratio declined from 5.68 in 2020 to 3.12 in 2023 but has shown a slight improvement to 3.71 in May 2025 [1]. This signals a moderately better coverage position, though still below earlier levels [1].

Overall Assessment of Debt and Stability:

While Oracle carries a significant amount of debt, the recent trends in its solvency and coverage ratios suggest an improving financial position. The company has successfully navigated a period of high leverage and negative equity, demonstrating a strong recovery in its equity base and a reduction in its debt-to-equity and debt-to-capital ratios [1]. The growth in total assets and EBIT also contributes to a more favorable outlook on its ability to manage debt [1] [2].

Analysts generally view Oracle's debt as manageable, especially given its substantial market capitalization of US$950.57 billion and its ability to generate earnings [3] [4]. Oracle's EBIT growth of 14% over the last year makes its debt load easier to manage [2]. However, its free cash flow conversion (42% of EBIT in the last three years) is lower than expected, which could make handling indebtedness more challenging [2].

Despite the positive trends in solvency, some sources highlight that Oracle's debt levels are high enough to warrant ongoing monitoring [2]. The company's financial leverage, while significantly reduced from its 2023 peak, remains a factor to watch [1].

In terms of stock stability, Oracle's stock has shown resilience during market downturns, recovering well from events like the Covid Pandemic and the Global Financial Crisis [5]. Its strong operational and financial foundation, including strong growth, very strong profitability (Operating Margin of 31.5%, Net Income Margin of 21.7%), and strong financial stability (Debt-to-Equity Ratio of 16.4% as of most recent quarter), contribute to its overall stability [5]. However, its current valuation, with a Price-to-Sales (P/S) ratio of 11.1 and a Price-to-Earnings (P/E) ratio of 51.0, is considered very high compared to the broader market and its historical averages, suggesting limited room for further growth based on current fundamentals [5].

In conclusion, while Oracle's absolute debt has increased, its solvency and coverage ratios indicate an improving ability to manage this debt, particularly with the strong recovery in its equity base. The stock demonstrates resilience, but its high valuation suggests that much of this positive financial performance is already priced in [5].