Salesforce.com Inc (CRM)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.06 | 1.11 | 1.04 | 1.11 | 1.09 | 1.04 | 1.02 | 1.02 | 1.02 | 1.05 | 1.06 | 1.03 | 1.05 | 1.06 | 0.93 | 1.33 | 1.23 | 1.22 | 1.15 | 1.15 |
| Quick ratio | 0.93 | 0.91 | 0.86 | 0.95 | 0.96 | 0.86 | 0.86 | 0.86 | 0.90 | 0.90 | 0.92 | 0.89 | 0.95 | 0.93 | 0.85 | 1.28 | 1.23 | 1.23 | 1.05 | 1.00 |
| Cash ratio | 0.50 | 0.66 | 0.60 | 0.77 | 0.54 | 0.61 | 0.60 | 0.65 | 0.48 | 0.66 | 0.69 | 0.69 | 0.50 | 0.66 | 0.61 | 1.07 | 0.79 | 0.96 | 0.78 | 0.76 |
Based on the liquidity ratios provided for Salesforce.com Inc, we can observe the following trends:
1. Current Ratio: The current ratio measures the company's ability to cover its short-term obligations with its current assets. Over the past few years, Salesforce.com Inc's current ratio has generally remained above 1, indicating that the company has had sufficient current assets to cover its current liabilities. However, there was a noticeable decrease in the current ratio in July 2021, falling below 1, which may suggest a temporary liquidity concern. Since then, the current ratio has improved and stabilized around 1, indicating a healthier liquidity position.
2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Similar to the current ratio, the quick ratio for Salesforce.com Inc has shown some fluctuations over the years. It exceeded 1 in most periods, except for some dips below 1, particularly in July 2021 and in periods after January 2024. This may indicate a minor liquidity strain, especially when inventory is not readily convertible to cash to meet short-term obligations.
3. Cash Ratio: The cash ratio evaluates the company's ability to pay off its current liabilities using only its cash and cash equivalents. Salesforce.com Inc's cash ratio has ranged between 0.48 and 1.07 over the reporting periods, with some fluctuations. Notably, there was a significant increase in the cash ratio in April 2021, suggesting a stronger cash position at that time. However, the ratio has since fluctuated, indicating changes in the levels of cash on hand relative to current liabilities.
In conclusion, while Salesforce.com Inc generally maintains liquidity ratios above industry standards, there have been periods of fluctuation, particularly in July 2021 and after January 2024. It is important for the company to closely monitor and manage its liquidity position to ensure it can meet its short-term obligations effectively.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle of Salesforce.com Inc has shown fluctuating trends over the periods provided in the data. The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows, has ranged from a low of 43.55 days to a high of 149.66 days.
In the latest periods, the cash conversion cycle has started to decrease after peaking at 149.66 days on January 31, 2021. It decreased to 114.69 days on January 31, 2025. This indicates that the company has been able to manage its working capital more efficiently in recent periods.
Overall, a lower cash conversion cycle is generally seen as positive as it signifies that the company is efficient in managing its operating cycle, which includes inventory turnover, accounts receivable collection, and accounts payable management. This efficiency can lead to improved liquidity and cash flows for the company.