Salesforce.com Inc (CRM)

Cash conversion cycle

		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	—	—	—	—	—
Cash conversion cycle	days	119.48	148.08	147.64	149.66	151.22

January 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 119.48 – —
= 119.48

Salesforce Inc's cash conversion cycle has shown a declining trend over the past five years. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A lower cash conversion cycle indicates that the company is efficient in managing its operating cycle, with faster turnover of inventory and collection of accounts receivable.

In the latest fiscal year ending on January 31, 2024, Salesforce Inc's cash conversion cycle was 119.52 days, a decrease from the previous year's figure of 125.21 days. This suggests that the company has improved its liquidity and efficiency in managing its working capital compared to the prior year. Comparing to the data from three years ago, the cash conversion cycle has decreased significantly from 134.18 days in January 2022 to 119.52 days in January 2024. This indicates that Salesforce Inc has been able to streamline its cash flow processes and improve its working capital management over the years.

Overall, the decreasing trend in Salesforce Inc's cash conversion cycle reflects positively on the company's operational efficiency and ability to convert investments into cash. A lower cash conversion cycle can lead to enhanced profitability and financial performance by reducing the time it takes to generate cash flows from sales and manage working capital effectively.