Salesforce.com Inc (CRM)
Liquidity ratios
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | |
|---|---|---|---|---|---|
| Current ratio | 1.06 | 1.09 | 1.02 | 1.05 | 1.23 |
| Quick ratio | 0.93 | 0.96 | 0.90 | 0.95 | 1.23 |
| Cash ratio | 0.50 | 0.54 | 0.48 | 0.50 | 0.79 |
The current ratio of Salesforce.com Inc has shown a decreasing trend over the past five years, indicating a weakening liquidity position. The ratio declined from 1.23 in January 31, 2021 to 1.06 in January 31, 2025. This suggests that the company's current assets may not be as sufficient to cover its current liabilities in the latest year.
Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, also decreased from 1.23 in January 31, 2021 to 0.93 in January 31, 2025. This trend suggests that Salesforce.com Inc may have more difficulty meeting its short-term obligations without relying on the sale of inventory.
Furthermore, the cash ratio, which focuses solely on the most liquid assets, cash and cash equivalents, also declined from 0.79 in January 31, 2021 to 0.50 in January 31, 2025. This indicates that the company may have limited cash reserves available to cover its current liabilities.
Overall, the liquidity ratios of Salesforce.com Inc demonstrate a decreasing trend over the five-year period, signaling potential challenges in meeting its short-term financial obligations and the need to closely monitor its liquidity position in the future.
See also:
Additional liquidity measure
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 114.69 | 119.48 | 148.08 | 147.64 | 149.66 |
The cash conversion cycle for Salesforce.com Inc has shown a consistent downward trend over the analyzed period. Starting at 149.66 days on January 31, 2021, it decreased to 114.69 days by January 31, 2025. This trend indicates that the company has been able to manage its cash flows more efficiently over the years.
A lower cash conversion cycle is generally seen as a positive indicator as it suggests that the company is able to convert its investments in inventory and accounts receivable into cash more quickly. This may be attributed to improved inventory management, faster collection of receivables, and effective payment of payables.
The decreasing trend in the cash conversion cycle implies that Salesforce.com Inc has been able to enhance its operational efficiency and optimize its working capital management. This can potentially lead to improved liquidity and better financial health for the company, as it indicates a more streamlined and optimized cash flow process.