Please respond to 1) and 2) by providing feedback and expanding the information.
1)
The parts of oracle financial statements that I found interesting include the revenue section. In most entries, there are positive changes, but overall, there is a recorded decline in revenue by $438 million. However, the equity section of the balance sheet shows an improvement, and I find that part interesting because it implies that the organization will have a low WACC due to the increase in the balance sheet.
The ratio analysis section shows positive improvements in the firm’s performance despite decreasing revenue and profits. I am impressed and, at the same time, startled by the positive increases in the ratio but again, based on the projected trends for 2022. I believe that the organization will perform better in the future (Oracle, 2021).
Information found outside the firm’s financial performance can affect its performance and stability in one way or the other. For example, customer perception and level of satisfaction can affect the organization’s future profitability and market share. The current COVID 19 pandemic leads to uncertainties and contingencies, which affect the organization’s future performance. Information related to interest rates and inflation rates affects the time value of money and can positively or negatively affects the organization. Generally, the information found outside the financial statements of oracle has a great impact on its future performance and contingency plans. Other information related to employee performance and motivation is significant when looking at the organization’s future performance because employees are the essential stakeholders who help meet customer needs.
From the responses posted by most of my peers, I am pleased to say that I agree with most of their analyses and predictions for the company’s performance, as 2020 was a very challenging year for most companies considering the challenges brought about by COVID 19 (Oracle, 2021). For the company to have sustainable success, financial management and decision-making will have to improve to achieve sustainable profitability and cost efficiency.
2)
I personally found this analysis to be challenging. Digging deep without a finance background made understanding the relevance with some of the terms difficult. I concluded the company is making money and ultimately able to distribute funds to the shareholders. They have however seemed to in recent time, based on the years covered in this analysis, done some heavy investing and have significant tax deferred assets. R&D looks to be at a steady state over the last three fiscal years.
1. What parts of Oracle’s financial statements did you find most interesting?
Using a plus or minus 20 percent change as a baseline in any one category, made for interesting observations when looking at acquisitions, interest expenses, and non-operating income. The tax deferred wages percent change had also significantly increased. The company’s net income percent change from 2019-2020 was negative but increased about 35 percent from 2020-2021.
2. Think outside the lens of finance. What can you glean about the company that’s not finance-related? What facts about the company have you learned in this process?
The company looks to hold a competitive edge in the marketplace and is diversified across several fronts from its products, partners, and developers. Oracle’s mission is to “help people see data in new ways, discover insights, unlock endless possibilities” (Oracle, n.d., 1 section).
3. How might the information you found outside of the financial statements impact the organization’s future?
Based on a review of their website and product line the company looks to be diversified across multiple industries with that focus on cloud-based services and support. They are capitalizing on changing environments in the digital arena to remain a competitive company with that innovative edge. An interesting recent partnership with Chipotle is an example of how one company has used an Oracle product to innovate and improve (Oracle, 2021).
