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Financial AnalysiCompany Being Evaluated                          Competitor #1   Competitor #2  Competitor #3
Oracle (ORCL) Microsoft (MSFT) Informix (IFMX) Sybase (SYBS)
Current Period Year-ago PeriodYear-over-Year Current Period Current Period Current Period
00Q2(11/99) 99Q2(11/98) Growth 00Q1 (9/99) 99Q3 (9/99) 99Q3 (9/99)
Income Statement . . .
Sales 2,322 2,056 12.9% 5,384 216 216
Cost of Goods Sold 753 780 -3.5% 712 55 65
Net Income 384 274 40.1% 2,191 24 16
Shares Outstanding 1,503 1,475 1.9%
Balance Sheet . . .
Cash & Equivalents 2,134 1,908 11.8% 18,902 214 275
Current Assets 4,400 4,088 7.6% 21,963 428 476
Short-term Debt 3 8 -62.5% 0 0 0
Current Liabilities 2,471 2,252 9.7% 8,332 317 364
Long-term Debt 301 304 -1.0% 980 0 0

Margins & Ratios . . . Competitors'
Average
Gross Margins 67.6% 62.1% 5.5 86.8% 74.5% 69.9% 77.1%
Net Margins 16.5% 13.3% 3.2 40.7% 11.1% 7.4% 19.7%
Cash-to-Debt 7.02 6.12 14.8% 19.29 No Debt! No Debt! 19.79
Net Cash 1830.0 1596.0 14.7% 17922.0 214.0 275.0 6137.0
Fool Flow Ratio 0.92 0.97 -5.5% 0.37 0.68 0.55 0.53
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Ranking Rule Makers
1) Brand Points (0-1) 3) Financial Dire Points (0-3)
Familiarity 1 Sales Growth 2
Openness 1 Gross Margins 3
Optimism 1 Net Margins 3
Legitimacy 1 Shares Outstanding 2
Inevitability 0 Cash-to-Debt 2
Solitariness 1 Fool Flow Ratio 2
Humor 1 Expansion Potential 3
Subtotal 6 Subtotal 17
2) Financial Loca Points (0-2) 4) Monopoly Statu Points (0-4)
Mass Market Habit 1 Gross Margins 0
Gross Margins 2 Net Margins 0
Net Margins 2 Net Cash 0
Cash-to-Debt 2 Fool Flow Ratio 0
Fool Flow Ratio 2 Convenience 2
Your Interest 2 Subtotal 2
Subtotal 11
5) Your Enjoyment 1
Total Score 37 Third Tier

I was surprised to see Oracle's score drop from 40 six months ago. My initial reaction
reading the earnings report was that the financial direction was very impressive:
gross margins up 5.5 points, net margins up 3.2 points, and the flow ratio down
more than 5%. However, these numbers bounce around quite a bit from quarter to
quarter, so the improvements may just reflect a weak year-ago quarter.

More importantly from a Rule Maker perspective, Oracle falls short of its competitors in
all three measures. Granted, Microsoft is a tough comparison, but even Informix and
Sybase best Oracle in gross margins and flow ratios.

Oracle's Rule Maker score was reduced by 1 point as sales growth slowed to under 15%.
The score was further reduced by 2 points as Oracle's net margins fell behind the
competitors' average. Informix and Sybase posted better results in the September
quarter than in the March quarter, driving up the competitors' average net margin
by more than 2 points.

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