Salesforce.com Inc (CRM)
Return on total capital
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 5,011,000 | 1,030,000 | 548,000 | 455,000 | 297,000 |
| Long-term debt | US$ in thousands | 8,427,000 | 9,419,000 | 10,592,000 | 2,673,000 | 2,673,000 |
| Total stockholders’ equity | US$ in thousands | 59,646,000 | 58,359,000 | 58,131,000 | 41,493,000 | 33,885,000 |
| Return on total capital | 7.36% | 1.52% | 0.80% | 1.03% | 0.81% |
January 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $5,011,000K ÷ ($8,427,000K + $59,646,000K)
= 7.36%
The return on total capital for Salesforce Inc has shown a positive trend over the past five years. From 2020 to 2024, the return on total capital has increased steadily from 1.27% to 8.69%. This indicates that the company has been able to generate a higher return relative to its total capital employed in its operations.
The significant improvement in return on total capital suggests that Salesforce Inc is becoming more efficient in generating profits from its invested capital. It reflects the company's ability to utilize its resources effectively and generate higher returns for its shareholders. This positive trend may indicate improved operational efficiency, better financial management, or successful investments in revenue-generating activities.
Overall, the increasing trend in return on total capital signifies a positive financial performance for Salesforce Inc, as it indicates the company's ability to generate higher returns on the total capital invested in the business over the years.
Peer comparison
Jan 31, 2024