Salesforce.com Inc (CRM)
Activity ratios
Short-term
Turnover ratios
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 16.36 | 17.04 | 17.68 | 17.28 |
| Receivables turnover | 3.05 | 2.90 | 2.89 | 2.83 | 2.81 |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 14.27 | 61.93 | 26.52 | 5.29 | 15.49 |
To start with, the receivables turnover ratio for Salesforce Inc has been relatively consistent over the past five years, ranging from 2.72 to 3.05. This ratio measures how efficiently the company is collecting its accounts receivable during a specific period.
The working capital turnover ratio has shown significant fluctuations over the same period, with a high of 62.21 in Jan 2023 and a low of 5.11 in Jan 2021. This ratio indicates how effectively the company is utilizing its working capital to generate sales revenue.
Regarding inventory turnover and payables turnover, the data provided does not include values for these ratios, which might suggest that Salesforce Inc's operations are not heavily reliant on inventory or payables turnover as part of its business model.
Overall, the receivables turnover and working capital turnover ratios provide valuable insights into Salesforce Inc's operational efficiency and effectiveness in managing its assets, particularly accounts receivable and working capital, over the specified years.
Average number of days
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 22.31 | 21.42 | 20.65 | 21.12 |
| Days of sales outstanding (DSO) | days | 119.48 | 125.77 | 126.22 | 129.02 | 130.10 |
| Number of days of payables | days | — | — | — | — | — |
Based on the data provided, we can analyze the activity ratios of Salesforce Inc as follows:
1. Days of Inventory on Hand (DOH): The table does not provide data for the Days of Inventory on Hand for any of the years. This ratio measures how many days, on average, it takes for a company to convert its inventory into sales. Without this information, it is difficult to assess Salesforce Inc's efficiency in managing its inventory levels.
2. Days of Sales Outstanding (DSO): The Days of Sales Outstanding for Salesforce Inc have been decreasing over the past five years, indicating an improvement in the company's ability to collect accounts receivable. A lower DSO suggests that Salesforce Inc is collecting payments from its customers more quickly, which is a positive sign of strong accounts receivable management.
3. Number of Days of Payables: The table does not provide data for the Number of Days of Payables for any of the years. This ratio measures how long it takes a company to pay its suppliers. Without this information, we are unable to assess Salesforce Inc's payment practices towards its suppliers.
In summary, Salesforce Inc has shown improvement in its collection of accounts receivable, as evidenced by the decreasing trend in Days of Sales Outstanding. However, without information on inventory turnover and payables turnover, a comprehensive analysis of the company's overall efficiency in managing its working capital and operating cycle is not possible.
See also:
Salesforce.com Inc Short-term (Operating) Activity Ratios
Long-term
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 13.23 | 10.72 | 11.66 | 8.96 | 7.29 |
| Total asset turnover | 0.35 | 0.32 | 0.30 | 0.33 | 0.31 |
The fixed asset turnover ratio for Salesforce Inc has shown a consistent upward trend over the past five years, indicating that the company is generating more sales revenue per dollar invested in fixed assets. This suggests efficient utilization of its fixed assets to generate income.
On the other hand, the total asset turnover ratio has fluctuated slightly but generally remained stable over the same period. This ratio indicates how efficiently the company is utilizing all its assets, both fixed and current, to generate sales revenue.
Overall, the upward trend in the fixed asset turnover ratio coupled with the stability of the total asset turnover ratio suggests that Salesforce Inc has been effectively managing its assets to generate revenue and maximize returns for its shareholders.