Salesforce Inc. (NYSE:CRM)

The analysis of the financial ratios over the periods from January 31, 2020, to January 31, 2025, reveals noteworthy trends in receivables and working capital management.

Receivables Turnover

The receivables turnover ratio exhibits a generally increasing trend, rising from 2.77 in 2020 to 3.17 in 2025. This indicates an improvement in the efficiency of the company in collecting its receivables over time, with a slight dip in 2021 and 2022, followed by consecutive increases through 2025.

Average Receivable Collection Period

Correlating with the receivables turnover, the average receivable collection period shows a decreasing pattern, reducing from 132 days in 2020 to 115 days in 2025. This further supports the observation that the company is collecting receivables more quickly, improving liquidity and cash flow.

Working Capital Turnover

The working capital turnover ratio demonstrates significant volatility across the years. It starts at 15.29 in 2020, falls sharply to 5.11 in 2021, then spikes dramatically to 62.21 in 2023 before dropping again to 14.27 in 2024 and rising to 21.69 in 2025. Such fluctuations may reflect changes in working capital management strategies or variations in operational efficiency and sales relative to working capital levels. The exceptionally high value in 2023 could indicate an atypical situation, such as a significant reduction in working capital or a surge in sales during that period.

Payables Turnover and Average Payables Payment Period

Data for payables turnover and average payables payment period are not available for any of the periods analyzed, limiting the ability to assess trends in the management of accounts payable.

In conclusion, the company shows improvement in receivables collection efficiency, as evidenced by the increasing receivables turnover and decreasing collection period. However, the working capital turnover exhibits considerable instability that merits further investigation to understand underlying causes and implications for operational and financial management. Lack of data on payables metrics restricts a comprehensive liquidity and working capital analysis.

The financial data demonstrates a consistent upward trend in revenues over the examined six-year period. Revenues increased from approximately $17.1 billion in January 2020 to nearly $37.9 billion in January 2025, reflecting significant growth year over year. This steady increase indicates expanding business operations and a strengthening market position.

Accounts receivable, net, also shows a rising trajectory, growing from around $6.2 billion in January 2020 to nearly $11.9 billion by January 2025. This increase suggests a parallel rise in sales on credit, which is consistent with the overall revenue growth. The increase in receivables could reflect extended customer payment terms or increased sales volume.

The receivables turnover ratio reveals important insights into the efficiency of collecting accounts receivable. Starting at 2.77 in January 2020, the turnover ratio experienced a slight decline to 2.72 by January 2022 but then steadily improved to 3.17 by January 2025. This improvement in turnover ratio indicates a progressively faster collection of receivables relative to credit sales, suggesting enhanced credit management and collection processes over the later periods.

Overall, the data indicates that while revenues and accounts receivable have grown substantially, the company has concurrently improved its ability to manage and collect outstanding receivables. This balance between revenue growth and receivables efficiency contributes positively to the company's liquidity and operational effectiveness.

Revenues

Increased continuously from $17.1 billion to $37.9 billion between 2020 and 2025, highlighting strong revenue growth.

Accounts receivable, net

Grew from $6.2 billion to $11.9 billion in the same period, consistent with increased sales on credit.

Receivables turnover ratio

Initially declined slightly but improved after 2022, rising from 2.77 to 3.17 by 2025, indicating enhanced collection efficiency.

The financial data indicates a consistent upward trend in the cost of revenues over the six-year period from January 31, 2020, to January 31, 2025. The cost of revenues increased from $4,235 million in 2020 to $8,643 million in 2025, nearly doubling over this timeframe.

This steady increase suggests expansion in business operations or higher production costs. The growth in cost of revenues is notable each year, with particularly larger year-over-year increases observed between 2020 to 2022 and 2022 to 2023. From 2023 through 2025, the increases continue but at a slightly moderated pace.

The absence of data for accounts payable and payables turnover limits the ability to analyze liabilities management or efficiency in paying suppliers. Consequently, no conclusions can be drawn regarding the company’s short-term obligations or liquidity through those metrics.

Overall, the rising cost of revenues reflects growing operational scale or input costs, which could impact profitability depending on corresponding revenue trends and cost control measures. Additional data would be needed for a comprehensive assessment of financial health and operational efficiency.

The analysis of the financial data over the periods ending January 31 from 2020 to 2025 reveals several key trends regarding working capital, revenues, and working capital turnover.

Working Capital

Working capital exhibited significant fluctuations during the reviewed years. Starting at 1,118 million US dollars in 2020, it sharply increased to 4,161 million in 2021. Subsequently, it experienced a steep decline to 1,062 million in 2022 and further diminished to 504 million in 2023. The trend reversed in 2024 with an increase to 2,443 million, followed by a decrease to 1,747 million in 2025. This volatility suggests considerable variability in short-term asset and liability management.

Revenues

Revenues demonstrated a steady and consistent upward trajectory throughout the period. Beginning at 17,098 million US dollars in 2020, revenues increased annually, reaching 21,252 million in 2021, 26,492 million in 2022, 31,352 million in 2023, 34,857 million in 2024, and culminating at 37,895 million in 2025. This pattern indicates a strong and continuous growth in sales or service income across the reviewed years.

Working Capital Turnover

The working capital turnover ratio fluctuated markedly across the periods. In 2020, the ratio stood at 15.29, decreasing significantly to 5.11 in 2021. It then rose dramatically to 24.95 in 2022 and reached its peak at 62.21 in 2023. However, it declined sharply afterward to 14.27 in 2024 and increased slightly to 21.69 in 2025. These swings suggest varying efficiency in utilizing working capital to generate revenues, with unusually high ratios in 2022 and 2023 indicating possible tight working capital levels or inefficiencies in asset management during those years.

Overall, the data reflect robust revenue growth alongside volatile working capital figures and turnover ratios. The working capital's fluctuations, combined with the uneven turnover ratios, imply shifting operational efficiency and liquidity management strategies, despite consistent revenue expansion.

The financial data presents an analysis of receivables turnover and the average receivable collection period over a six-year period. The information reveals trends in the company's efficiency regarding accounts receivable management.

Receivables Turnover

The receivables turnover ratio demonstrates a fluctuating but overall improving trend. Starting at 2.77 in the fiscal year ending January 31, 2020, the ratio slightly decreased to 2.73 and 2.72 in the next two years respectively. However, from January 31, 2023 onward, there is a noticeable increase—rising to 2.92, then 3.05, and reaching 3.17 by January 31, 2025. This upward movement indicates a progressively stronger ability to convert receivables into cash more quickly over these years.

Average Receivable Collection Period

The average receivable collection period, expressed in days, inversely reflects the trend seen in the receivables turnover. Initially, the period is relatively high at 132 days in 2020 and increases marginally to 134 days over the next two years, implying a slower collection process. From 2023 onwards, this trend reverses and the collection period decreases steadily to 125, then to 120, and finally to 115 days by 2025. This downward trend suggests improvements in the company's efficiency in collecting outstanding receivables, leading to a shorter cash conversion cycle.

In summary, both metrics illustrate enhanced efficiency in accounts receivable management starting from the fiscal year 2023. The increase in receivables turnover ratio alongside the decrease in the average collection period indicates a more effective credit and collection policy or improved customer payment behaviors. Such improvements are favorable as they contribute positively to the company's liquidity and operational cash flow.

The financial data provided for the analyzed periods lacks specific numerical values for both the payables turnover ratio and the average payables payment period. As these key indicators of accounts payable efficiency are missing, it is not possible to determine any trends, changes, or insights related to the company's payment practices or liquidity management over the reported years.

Without recorded data, no assessment can be made concerning whether the company has improved or deteriorated in managing its payables cycle, nor can any comparison be drawn across the different years. The absence of this information limits the ability to analyze the operational and financial health aspects linked to supplier payments and working capital management.