Analysis of Property, Plant and Equipment
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- Income Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Property, Plant and Equipment Disclosure
Salesforce Inc., balance sheet: property, plant and equipment
US$ in millions
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
- Land
- The value of land increased significantly from 184 million US$ in early 2020 to 293 million US$ by early 2021 and then remained stable at 293 million US$ through to early 2025. This indicates a one-time acquisition or revaluation followed by no further changes.
- Buildings and building improvements
- This category shows a decline from 777 million US$ in early 2020 to 485 million US$ in early 2021, after which the value remained relatively stable with a slight upward trend reaching 492 million US$ by early 2025. This initial drop may suggest disposals or impairments, while later stability indicates minimal new investments or improvements.
- Computers, equipment and software
- There is a steady and substantial increase from 1,608 million US$ in early 2020 to 4,345 million US$ by early 2025. This represents consistent investment and upgrading in technology-related assets, reflecting an emphasis on maintaining and expanding digital infrastructure.
- Furniture and fixtures
- The value of furniture and fixtures shows slight increases from 226 million US$ in 2020 to a peak of 259 million US$ in early 2023, followed by a decline to 232 million US$ by early 2025. This suggests moderate additions initially, but some disposals or write-downs in later periods.
- Leasehold improvements
- This category increased steadily from 1,381 million US$ in early 2020 to a peak of 1,807 million US$ in early 2023, then declined to 1,556 million US$ by early 2025. The initial growth may imply ongoing improvements to leased properties, with the subsequent decrease possibly due to amortization or reduced investment.
- Property and equipment, gross
- The gross value of property and equipment grew consistently from 4,176 million US$ in early 2020 to 6,918 million US$ in early 2025. This reflects overall capital expenditure and asset acquisitions increasing the company's asset base significantly over the period.
- Accumulated depreciation and amortization
- The accumulated depreciation and amortization increased steadily in magnitude from -1,801 million US$ in early 2020 to -3,682 million US$ in early 2025. This trend is consistent with aging assets and ongoing usage, representing the systematic allocation of asset costs over their useful lives.
- Property and equipment, net
- The net property and equipment value rose from 2,375 million US$ in early 2020 to a peak of 3,702 million US$ in early 2023, followed by a decline to 3,236 million US$ by early 2025. The increase reflects capital investments exceeding depreciation in the earlier years, while the later decline may result from higher depreciation expense or asset disposals outpacing new acquisitions.
Asset Age Ratios (Summary)
Salesforce Inc., asset age ratios
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
- Average Age Ratio
- The average age ratio exhibited a fluctuating trend from 2020 through 2025. Starting at 45.12% in 2020, it increased to 47.44% in 2021 and further to 48.77% in 2022. A decline to 44.22% occurred in 2023, followed by an upward revision to 48.14% in 2024 and a more pronounced increase to 55.58% in 2025. This pattern indicates a general aging of the property, plant, and equipment over the period, with some variability, particularly the dip observed in 2023.
- Estimated Total Useful Life
- The estimated total useful life of the assets demonstrates a downward adjustment over time. Initially estimated at 9 years in 2020, it reduced to 7 years for the years 2021 through 2023. A further decrease to 6 years was noted in 2024 before returning to 7 years in 2025. This suggests a reassessment of asset longevity, possibly due to changes in asset composition or updated depreciation assumptions.
- Estimated Age (Time Elapsed Since Purchase)
- The estimated age of the assets fluctuated moderately, starting at 4 years in 2020, dropping to 3 years in 2021, rising again to 4 years in 2022, then decreasing back to 3 years in 2023 and 2024, followed by an increase to 4 years in 2025. This variation may reflect the timing and scale of asset acquisitions or disposals influencing the average age calculation.
- Estimated Remaining Life
- The estimated remaining life showed a consistent decline over the years. Starting at 5 years in 2020, it decreased to 4 years from 2021 through 2023, dropping further to 3 years in 2024 and maintaining that level into 2025. This trend aligns with the aging of assets as observed in the average age ratio and suggests limited additions of new assets or shorter useful life estimates.
Average Age
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
2025 Calculations
1 Average age = 100 × Accumulated depreciation and amortization ÷ (Property and equipment, gross – Land)
= 100 × ÷ ( – ) =
- Property and Equipment Gross Value
- The gross value of property and equipment shows a generally increasing trend from January 31, 2020, to January 31, 2025. Starting at $4,176 million in 2020, it steadily rises each year, reaching $6,918 million by 2025. The most notable increase occurs between 2021 and 2023, where the value grows from $4,414 million to $6,404 million, indicating significant capital investments during this period. The growth rate appears to slow down after 2023.
- Accumulated Depreciation and Amortization
- Accumulated depreciation and amortization also increase consistently over the observed years, beginning at $1,801 million in 2020 and rising to $3,682 million by 2025. This steady rise reflects ongoing asset depreciation aligned with the increase in gross property and equipment. The increments are somewhat proportionate, indicating systematic and continuous depreciation practices.
- Land Holdings
- The value of land remains constant at $293 million from 2021 through 2025, after an initial increase from $184 million in 2020. This suggests no significant acquisitions or disposals of land assets after 2021, implying stability in this asset category.
- Average Age Ratio
- The average age ratio shows some fluctuations throughout the years, starting at 45.12% in 2020 and increasing moderately to 47.44% in 2021 and 48.77% in 2022. It then dips to 44.22% in 2023, likely due to recent asset additions reducing the average age of the asset base. Thereafter, it rises sharply to 48.14% in 2024 and further to 55.58% in 2025, indicating an aging asset base or slower asset turnover in the later years. The trend suggests a potential increase in the age of equipment relative to its useful life, which may have implications for maintenance and replacement strategies.
Estimated Total Useful Life
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
2025 Calculations
1 Estimated total useful life = (Property and equipment, gross – Land) ÷ Depreciation and amortization expense
= ( – ) ÷ =
- Property and equipment, gross
- The gross value of property and equipment has shown a consistent upward trend over the observed periods. Starting from US$4,176 million in 2020, it increased annually to reach US$6,918 million by 2025. This reflects ongoing investments and additions to the company’s property and equipment base, indicating expansion or upgrades in fixed assets.
- Land
- The value of land remained constant at US$293 million from 2021 onwards, following an initial increase from US$184 million in 2020. This stabilization suggests no further acquisition or disposal of land assets during this period, implying that growth in gross property and equipment is primarily driven by other asset categories.
- Depreciation and amortization expense
- This expense has increased substantially from US$455 million in 2020 to a peak of US$1,100 million in 2024, before slightly declining to US$1,000 million in 2025. The rising trend aligns with the growth in gross property and equipment, reflecting increased cost recognition as assets are used and depreciated. The decrease in 2025 might indicate changes in asset composition, depreciation policies, or asset disposals.
- Estimated total useful life
- The estimated useful life of assets fluctuated modestly, decreasing from 9 years in 2020 to 7 years in 2021 through 2023, dropping further to 6 years in 2024, and returning to 7 years in 2025. This variability suggests revisions to asset lifespan assumptions, potentially reflecting changes in asset types, technological obsolescence, or updated management estimates of economic utility.
Estimated Age, Time Elapsed since Purchase
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
2025 Calculations
1 Time elapsed since purchase = Accumulated depreciation and amortization ÷ Depreciation and amortization expense
= ÷ =
- Accumulated Depreciation and Amortization
- The accumulated depreciation and amortization has shown a consistent upward trend over the examined period. Starting from US$1,801 million in January 2020, it increased steadily each year, reaching US$3,682 million by January 2025. This reflects a continuous allocation of the cost of property, plant, and equipment over time, indicating ongoing asset utilization and aging.
- Depreciation and Amortization Expense
- Depreciation and amortization expense exhibited an increasing pattern from US$455 million in January 2020 to a peak of US$1,100 million in January 2024. However, in the following year, January 2025, it decreased slightly to US$1,000 million. The overall rise until 2024 suggests increased asset additions or changes in depreciation methods or estimations, while the subsequent decline may imply a slowdown in asset capitalization or a shift in depreciation schedules.
- Time Elapsed Since Purchase
- The average time elapsed since purchase fluctuated between 3 and 4 years during the period under review without a clear increasing or decreasing trend. This stability suggests a relatively consistent asset turnover or replacement cycle without pronounced acceleration or delay in newly acquired asset usage.
- Summary Insights
- The data indicates a steady accumulation of depreciation and amortization, consistent with ongoing asset deployment. The depreciation expense's rise until 2024 aligns with possible increased investments in property, plant, and equipment or accelerated depreciation policies, followed by a mild reduction pointing towards potential stabilization or revised asset management strategies. The fairly constant time elapsed since purchase supports a regular asset acquisition cadence.
Estimated Remaining Life
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
2025 Calculations
1 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation and amortization expense
= ( – ) ÷ =
- Property and Equipment, Net
- The net value of property and equipment demonstrates an overall increasing trend from $2,375 million in 2020 to a peak of $3,702 million in 2023, followed by a decline to $3,236 million in 2025. This pattern indicates substantial growth in asset investment or acquisitions through 2023, with a subsequent reduction possibly due to disposals, impairments, or accelerated depreciation.
- Land
- The value of land steadily increased from $184 million in 2020 to $293 million in 2021, after which it remained constant through 2025. This suggests an acquisition of land assets completed by 2021, with no further land purchases or disposals recorded in subsequent years.
- Depreciation and Amortization Expense
- Depreciation and amortization expenses have increased consistently from $455 million in 2020 to a high of $1,100 million in 2024, followed by a decrease to $1,000 million in 2025. The rising expense reflects the growing asset base and/or changes in depreciation methods or rates, while the decrease in 2025 may indicate adjustments due to asset retirements or changes in estimated useful lives.
- Estimated Remaining Life
- The estimated remaining life of assets shows a decline from 5 years in 2020 to 3 years by 2024 and 2025. This reduction suggests that the assets are aging, or the company has revised its useful life estimates downward, potentially reflecting accelerated wear or changes in technological obsolescence.