Salesforce Inc. (NYSE:CRM)

The short-term operating activity ratios exhibit varied trends over the observed period. Receivables turnover demonstrates cyclicality, while working capital turnover shows significant fluctuations. The average receivable collection period mirrors the trends in receivables turnover, with notable peaks in collection times.

Receivables Turnover

Receivables turnover generally fluctuates between approximately 5.78 and 8.86. A notable decrease is observed in the January 31st periods of 2022, 2023, 2024, and 2025, falling to 2.72, 2.92, 3.05, and 2.90 respectively. Following these declines, a rebound is seen in the subsequent April periods, reaching a high of 8.86 in April 2025. The most recent periods show a slight decrease to 7.37 and 2.90. This pattern suggests potential seasonality or specific events impacting the speed of receivables collection.

Working Capital Turnover

Working capital turnover displays substantial variability. Values range from a low of 14.27 to a high of 99.31. The ratio experiences significant increases in late 2021 and early 2022, peaking at 99.31 in January 2023. A subsequent decline is observed, followed by another increase in July 2024. The most recent periods show a decrease to 18.14 and an absence of values for October and January periods. The high degree of fluctuation suggests considerable changes in the utilization of working capital, potentially linked to shifts in operational strategies or external economic factors.

Average Receivable Collection Period

The average receivable collection period generally moves inversely with receivables turnover. Collection periods are typically around 50-63 days, but increase substantially to 134 days in January 2022, 125 days in January 2023, 120 days in January 2024, and 126 days in January 2026. These extended collection periods align with the lower receivables turnover figures observed in those same periods. A reduction in the collection period is evident in the April 2025 period, falling to 41 days, corresponding with the peak in receivables turnover. The most recent period shows a collection period of 126 days.

Overall, the analysis indicates a cyclical pattern in receivables management, with periods of efficient collection followed by periods of slower collection. Working capital turnover demonstrates a more volatile pattern, potentially reflecting strategic adjustments or external influences. Further investigation into the factors driving these fluctuations would be beneficial.

The receivables turnover ratio exhibits considerable fluctuation over the observed period. Initially, the ratio demonstrates a decline from 7.04 in April 2021 to 5.78 in July 2021, followed by a modest recovery to 6.22 in October 2021. A significant drop is then observed in January 2022, falling to 2.72, before rebounding to 7.07 in April 2022.

Overall Trend

The ratio generally oscillates between approximately 6 and 8, with intermittent periods of substantial decline. These declines consistently occur in the January periods, suggesting a potential seasonal or cyclical effect related to billing or collection practices. The latter part of the observed period shows a similar pattern of fluctuation, with a notable decrease in January 2025 (to 3.17) and January 2026 (to 2.90).

A pattern emerges where the ratio tends to decrease in the first quarter of the calendar year (January), potentially indicating a slower collection of receivables during this period. This is followed by increases in subsequent quarters, suggesting improved collection efficiency. However, the magnitude of the decline in January varies, with the drop in January 2022 and January 2023 being particularly pronounced.

Recent Performance

From April 2024 through July 2025, the ratio fluctuates between 8.36 and 7.06. The most recent observation, January 2026, shows a ratio of 2.90, representing a substantial decrease from the prior quarter and aligning with the previously observed January declines. This recent drop warrants further investigation.

The observed fluctuations in receivables turnover may be linked to changes in credit policies, customer payment behavior, or the timing of revenue recognition. The consistent pattern of lower turnover in January suggests a systematic factor influencing collections during that period. Further analysis, incorporating information on sales terms, credit risk, and collection efforts, would be beneficial to fully understand these trends.

Notable Observations

The ratio reached its highest point at 8.86 in April 2025. Conversely, the lowest ratio was recorded in January 2022 at 2.72. The difference between these values highlights the significant variability in the company’s efficiency in converting receivables into cash.

The working capital turnover ratio exhibits considerable fluctuation throughout the observed period. Initial values indicate a ratio of 4.36, followed by a missing value for the subsequent quarter. A significant increase is then observed, peaking at 99.31 before declining and stabilizing around the low teens.

Overall Trend

The ratio demonstrates a lack of consistent trend. While periods of substantial increase are present, these are interspersed with declines and periods of relative stability. The latter half of the observed period shows a general tendency towards lower turnover rates, with a notable decrease in the final reported periods.

Initial Period (Apr 30, 2021 – Jan 31, 2022)

Following the initial value, the ratio experiences a substantial surge, reaching 27.10 and 24.95 in consecutive quarters. This suggests a more efficient utilization of working capital during this timeframe. The ratio then increases to 54.57 before decreasing to 25.15.

Peak and Subsequent Decline (Oct 31, 2022 – Jan 31, 2024)

The ratio reaches its highest point at 62.21, followed by 90.67 and 99.31, indicating a period of exceptionally efficient working capital management. However, a sharp decline is then observed, falling to 42.02, 14.27, and 14.56. This suggests a potential slowdown in the conversion of working capital into revenue.

Recent Performance (Apr 30, 2024 – Jan 31, 2026)

The ratio experiences a temporary increase to 42.35, but subsequently decreases to 18.14, 21.69, 23.11, and 14.11. The final two reported values are missing, followed by significantly negative working capital figures, resulting in an undefined ratio. This suggests a substantial shift in working capital management or potential financial distress.

The volatility in the working capital turnover ratio warrants further investigation. The significant fluctuations suggest potential changes in operational efficiency, inventory management, or credit policies. The recent decline and negative working capital values raise concerns about the company’s short-term financial health and its ability to effectively utilize its current assets.

The average receivable collection period exhibits considerable fluctuation over the observed timeframe. While generally clustering between 41 and 63 days, significant spikes indicate periods of extended collection times. An initial period of relative stability is followed by pronounced variability, then a return to more consistent figures, and finally, renewed fluctuation.

Overall Trend

The average collection period does not demonstrate a clear, sustained trend. It oscillates, suggesting the influence of factors impacting the timing of customer payments. The period generally remains within a manageable range, but deviations warrant further investigation.

Initial Period (Apr 30, 2021 – Oct 31, 2021)

The collection period begins at 52 days, increases to 63 days, and then decreases to 59 days. This initial fluctuation suggests some variability in customer payment behavior, but remains within a relatively narrow band.

Significant Increases (Jan 31, 2022 & Jan 31, 2023)

A substantial increase to 134 days is observed as of January 31, 2022, followed by a decrease but another increase to 125 days as of January 31, 2023. These peaks represent a significant lengthening of the time required to collect receivables, potentially indicating issues with credit policies, collection efforts, or customer financial difficulties during those periods. The subsequent declines suggest these were temporary issues.

Period of Improvement (Apr 30, 2022 – Oct 31, 2022)

Following the peak in January 2022, the collection period decreases to 52 days by October 31, 2022, demonstrating improved collection efficiency. This period of stability is then followed by a further decrease to 44 days by April 30, 2023.

Recent Fluctuations (Jan 31, 2024 – Jan 31, 2026)

The collection period increases to 115 days by January 31, 2024, then decreases to 41 days by April 30, 2024. This is followed by a period of relative stability, then a significant increase to 126 days by January 31, 2026. This recent volatility suggests a re-emergence of factors impacting collection timing, requiring monitoring.

The observed fluctuations in the average receivable collection period suggest a dynamic relationship with external or internal factors. Consistent monitoring and analysis of underlying causes for these variations are recommended to maintain efficient cash flow management.