Salesforce.com Inc (CRM)

Cash conversion cycle

		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
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
Days of sales outstanding (DSO)	days	114.69	46.50	53.91	43.55	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
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	114.69	46.50	53.91	43.55	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

January 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 114.69 – —
= 114.69

The cash conversion cycle (CCC) is a key financial metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. For Salesforce.com Inc, we observe fluctuations in the CCC over the disclosed periods from April 30, 2020, to January 31, 2025.

Analyzing the trend, we observe that the CCC for Salesforce.com Inc varied over time, indicating changes in its working capital management efficiency. Initially, the CCC remained relatively stable around 70-80 days from April 2020 to October 2021. However, there was a significant increase in the CCC by January 2021, reaching 149.66 days, which might suggest challenges in the company's cash flow conversion efficiency during that period.

Subsequently, there was a notable improvement in the CCC by April 2021, dropping to 70.40 days, and staying relatively low until January 2022. However, another significant spike in the CCC was observed by January 2022, reaching 147.79 days, indicating potential cash flow management issues during that period.

From January 2022 to January 2025, Salesforce.com Inc managed to reduce its CCC gradually, showing improvements in its working capital management efficiency. The CCC decreased to 43.55 days by April 30, 2024, further improving to 46.50 days by October 31, 2024, and finally declining to 114.69 days by January 31, 2025.

Overall, fluctuations in the CCC of Salesforce.com Inc suggest changes in its ability to efficiently manage working capital, convert investments into cash, and operate its business effectively. Investors and stakeholders should closely monitor the company's CCC trend as it reflects its liquidity, operational efficiency, and financial health.