Salesforce.com Inc (CRM)

Cash conversion cycle

		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	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Days of inventory on hand (DOH)	days	—	21.75	21.93	21.59	22.31	20.00	20.09	20.42	21.42	19.37	20.29	20.46	20.65	19.35	18.70	18.48	21.12	20.41	21.52	22.66
Days of sales outstanding (DSO)	days	119.48	52.51	60.15	52.89	125.77	51.35	57.72	49.31	126.37	54.37	59.51	49.94	129.02	58.31	62.97	60.03	129.00	57.90	56.93	54.93
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	119.48	74.26	82.08	74.48	148.08	71.35	77.81	69.74	147.79	73.74	79.80	70.40	149.66	77.67	81.67	78.51	150.12	78.31	78.45	77.59

January 31, 2024 calculation

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

The cash conversion cycle of Salesforce Inc has shown fluctuations over the past eight quarters. In Q4 2024, the cash conversion cycle increased to 119.52 days compared to the previous quarter, indicating a longer time taken to convert resources invested into cash inflows. This may suggest potential issues with managing working capital efficiently during that period.

Conversely, Q3 2024 showed a significant improvement with a cash conversion cycle of 52.14 days, reflecting a more efficient utilization of resources and quicker conversion to cash. However, this improvement was not sustained in the following quarter, as Q2 2024 saw a slight increase to 59.60 days.

Comparing the current year's performance to the same quarters in the previous year, there appears to be a general trend of longer cash conversion cycles in Q4, which could be indicative of seasonal variations or business cycles impacting cash flow management.

Overall, Salesforce Inc should focus on optimizing its cash conversion cycle to ensure timely conversion of investments into cash receipts, thereby improving liquidity and operational efficiency. Tracking these fluctuations over time can help identify areas for improvement in working capital management.