Salesforce.com Inc (CRM)

Working capital turnover

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020
Revenue (ttm)	US$ in thousands	38,014,000	37,212,000	36,503,000	35,816,000	34,869,000	33,714,000	32,766,000	31,966,000	31,213,000	30,389,000	30,006,000	29,252,000	28,129,000	26,979,000	24,988,000	23,197,000	22,027,000	20,756,000	19,969,000	18,704,000
Total current assets	US$ in thousands	29,727,000	21,425,000	21,862,000	25,604,000	29,074,000	20,202,000	21,138,000	21,981,000	26,395,000	19,209,000	21,246,000	20,411,000	22,850,000	15,957,000	16,256,000	20,444,000	21,889,000	14,946,000	14,846,000	14,713,000
Total current liabilities	US$ in thousands	27,980,000	19,375,000	21,001,000	23,149,000	26,631,000	19,394,000	20,805,000	21,626,000	25,891,000	18,227,000	20,080,000	19,899,000	21,788,000	15,035,000	17,393,000	15,323,000	17,728,000	12,234,000	12,963,000	12,843,000
Working capital turnover		21.76	18.15	42.40	14.59	14.27	41.73	98.40	90.05	61.93	30.95	25.73	57.13	26.49	29.26	—	4.53	5.29	7.65	10.60	10.00

January 31, 2025 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $38,014,000K ÷ ($29,727,000K – $27,980,000K)
= 21.76

The working capital turnover ratio indicates how efficiently a company is utilizing its working capital to generate sales. A higher ratio suggests better utilization of working capital.

Analyzing the working capital turnover of Salesforce.com Inc over the given period shows fluctuation in the efficiency of working capital management. The ratio was at a high of 10.6 in July 2020, indicating that for every dollar of working capital, the company generated $10.6 in sales. However, the ratio declined to 4.53 in April 2021 and remained at low levels until October 2021.

A significant improvement was observed in the company's working capital turnover from October 2021 to April 2023, with the ratio increasing to 90.05. This surge indicates a substantial enhancement in efficiency in utilizing working capital to generate revenue.

However, the ratio declined from the peak of 98.40 in July 2023 to 14.59 in April 2024, showing a decrease in the utilization of working capital for generating sales. Subsequently, the ratio increased to 42.40 in July 2024 and then decreased to 21.76 in January 2025.

The fluctuations in Salesforce.com Inc's working capital turnover ratio suggest varying levels of effectiveness in managing working capital to support sales generation over the analyzed period. It is crucial for the company to monitor and optimize its working capital management to ensure efficient utilization and sustained growth in revenue generation.