Salesforce Inc. (NYSE:CRM)

The analysis of the quarterly financial ratios indicates significant fluctuations and evolving trends in the company's operational efficiency and working capital management over the observed periods.

Receivables Turnover Ratio

The receivables turnover ratio exhibits a cyclical pattern with recurrent peaks and troughs approximately every four quarters. The ratio tends to reach higher values around the April and October periods, suggesting periods of improved efficiency in collecting receivables. Notably, the ratio dips substantially during the January quarters, indicating a slowdown in collections or an accumulation of receivables during those times. Over the long term, the receivables turnover ratio shows a slight upward trend, with peaks increasing from around 7.04 in April 2021 to 8.86 in April 2025, pointing to moderately enhanced collection efficiency in recent periods.

Working Capital Turnover Ratio

The working capital turnover ratio displays considerable volatility, with some missing data points complicating continuous trend assessment. Despite this, the ratio demonstrates several pronounced spikes, particularly in the April quarters of 2022 and 2023, where it reached elevated values of 54.57 and 90.67 respectively, and again in the July and October 2023 quarters. This pattern suggests episodic improvements in using working capital to generate sales or possibly reflects timing differences in working capital components or revenue recognition. After these peaks, the ratio shows a marked decline in early 2024 and fluctuates at a relatively lower level thereafter, indicating a potential normalization or stabilization phase.

Average Receivable Collection Period

The average collection period aligns inversely with the receivables turnover ratio, with extended collection periods during January quarters, often surpassing 110 days, contrasting with shorter periods close to 50 days in other quarters. This cyclical extension may indicate seasonal or operational factors delaying collections at year-start. From 2020 through 2025, the collection period in non-January quarters shows a gradual reduction from around 62 days to near 50 days, signaling an overall improvement in credit management and cash flow timing outside the peak delay periods.

Overall, the data reflects a seasonal influence on receivables management and working capital utilization, with distinct recurrent quarter-end effects impacting performance metrics. There is evidence of progressing efficiency in receivables collection over the medium term, despite periodic delays, and a considerable but irregular expansion and contraction of working capital turnover, suggesting the company experiences both operational shifts and possibly changes in sales volume or credit terms impacting liquidity dynamics.

Revenues

The revenue figures exhibit a consistent upward trend from April 2020 through January 2025. Starting at approximately 4,865 million USD in April 2020, revenues increase steadily each quarter, with minor fluctuations, reaching over 10,000 million USD by the latter periods. This growth pattern indicates a positive sales momentum and expanding business scale over the analyzed timeframe.

Accounts Receivable, Net

The net accounts receivable values reveal a more volatile pattern with periods of sharp increases occurring every fourth quarter. The amounts fluctuate around the 3,000 to 5,500 million USD range in most quarters but spike significantly at intervals (e.g., April 2021, January 2022, January 2023, January 2024, and January 2025), reaching values between approximately 9,700 to 11,900 million USD. This recurring elevation every four quarters suggests seasonal or cyclical collection delays or changes in sales terms affecting receivables at these points.

Receivables Turnover Ratio

The receivables turnover ratio displays a cyclic pattern aligned inversely with the accounts receivable fluctuations. The ratio generally ranges between roughly 5.6 to 8.9 but drops significantly to values near 2.7 to 3.2 in the quarters where accounts receivable spike. This inverse relationship indicates that during periods with elevated accounts receivable, the company is less efficient at collecting its receivables, reducing turnover. Conversely, in quarters with lower receivables balances, the turnover ratio improves, suggesting stronger collection efficiency.

Overall Insights

The data indicates steady growth in revenue, reflecting expanding business operations. However, the recurring spikes in accounts receivable and the corresponding drops in receivables turnover ratio suggest challenges in receivables management that occur periodically, likely due to cyclical business dynamics or timing of invoicing and collections. The company appears to maintain healthy revenue growth despite these fluctuations, but the cyclical increase in outstanding receivables could represent liquidity constraints or risks that require attentive management focus to ensure cash flow stability.

The analysis of the quarterly financial data reveals significant fluctuations across key financial metrics over the observed period.

Working Capital

Working capital exhibits considerable volatility. It initially increases from 1,870 million US dollars in April 2020 to a peak of 5,121 million by April 2021. This is followed by a sharp negative turnover reaching -1,137 million in July 2021. Subsequently, it recovers with intermittent rises and declines, showing values around the mid-thousands with a notable dip to -347 million projected by October 2025. The pattern suggests instability in short-term liquidity management or changes in current asset and liability structures during the timeframe.

Revenues

Revenues demonstrate consistent growth, rising steadily from 4,865 million US dollars in April 2020 to a forecasted 10,259 million in October 2025. Despite minor fluctuations, the long-term trend points to solid top-line expansion, with several quarters reflecting accelerated revenue increases. This growth trajectory indicates successful sales performance or market expansion throughout the period.

Working Capital Turnover

Working capital turnover ratios display extreme variability. Starting at 9.75 in April 2020, the ratio declines to 4.36 by April 2021 and is not reported for July 2021 due to negative working capital. Subsequently, ratios spike dramatically, reaching unprecedented highs such as 90.67 in April 2023 and 99.31 in July 2023, indicating highly efficient utilization of working capital relative to revenues in certain quarters. However, these spikes are interspersed with more moderate values and some missing data, reflecting the volatility and intermittently negative working capital values. This volatility may be indicative of irregular operating cycles, asset management challenges, or accounting adjustments.

In summary, the company demonstrates a robust revenue growth over the observed timeframe. However, working capital management appears inconsistent with frequent shifts between positive and negative levels, which is mirrored in the erratic working capital turnover ratios. This may warrant further examination to understand underlying operational factors or financial strategies influencing liquidity and asset usage efficiency.

The analysis of the receivables turnover ratio over the observed quarters reveals a recurring cyclical pattern characterized by fluctuations between higher and notably lower values. Generally, the ratio oscillates between approximately 6 and 7 during most quarters, signifying relatively efficient management of receivables. However, every fourth quarter or so, there is a pronounced dip to around 2.7 to 3.2, indicating a significant slowdown in receivables collection during these specific periods.

This pattern is mirrored inversely by the average receivable collection period, which demonstrates an alternating trend between relatively low values near 50 to 65 days and sharp increases to values ranging from approximately 115 to 134 days during the corresponding quarters when the turnover ratio declines. The periods of longer collection align precisely with the quarters exhibiting the lower turnover ratios, confirming a clear seasonal or cyclic delay in receivables collection approximately every four quarters.

Over the entire timeframe, there is a slight downward trend in the number of days for average receivable collection during the non-peak quarters, suggesting marginal improvement in collection efficiency outside of the periodic slowdowns. Simultaneously, the receivables turnover ratio shows occasional upward movements in these intervals, reflecting this increased efficiency.

In summary, the data indicate a consistent and repeating pattern of receivables collection challenges occurring roughly annually, which substantially impact turnover and collection period metrics. Outside these periods, the company maintains relatively stable and moderately efficient receivables management, with signs of gradual improvement in reducing the average collection days over time.

Receivables Turnover

Exhibits cyclical fluctuations, typically ranging from 6 to 7 with drops to approximately 2.7 to 3.2 in certain quarters.

Average Receivable Collection Period

Displays inverse behavior relative to turnover, alternating between 50–65 days and spikes of 115–134 days in corresponding periods.

Trend Insights

The data suggest recurring seasonal delays in receivables collection roughly every four quarters, coupled with incremental improvements in collection efficiency during other periods over the analyzed timeframe.