Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

salesforce.com inc. (NYSE:CRM)

Analysis of Goodwill and Intangible Assets

Advanced level


Goodwill and Intangible Asset Disclosure

salesforce.com inc., balance sheet: goodwill and intangible assets

US$ in millions

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Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
Acquired developed technology 3,598  1,429  1,027  1,092  684  674 
Customer relationships 3,252  1,938  831  844  411  410 
Other 72  52  53  69  59  51 
Intangible assets, gross 6,922  3,419  1,911  2,005  1,154  1,135 
Accumulated amortization (2,198) (1,496) (1,084) (892) (664) (503)
Intangible assets, net 4,724  1,923  826  1,113  490  632 
Goodwill 25,134  12,851  7,314  7,264  3,850  3,783 
Goodwill and intangible assets 29,858  14,774  8,141  8,377  4,340  4,415 

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

Item Description The company
Intangible assets, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. salesforce.com inc.’s intangible assets, net increased from 2018 to 2019 and from 2019 to 2020.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. salesforce.com inc.’s goodwill increased from 2018 to 2019 and from 2019 to 2020.
Goodwill and intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. salesforce.com inc.’s goodwill and intangible assets increased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Goodwill

salesforce.com inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
Adjustment to Total Assets
Total assets (as reported) 55,126  30,737  21,010  17,585  12,771  10,693 
Less: Goodwill 25,134  12,851  7,314  7,264  3,850  3,783 
Total assets (adjusted) 29,992  17,886  13,696  10,321  8,921  6,910 
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 33,885  15,605  9,388  7,500  5,003  3,975 
Less: Goodwill 25,134  12,851  7,314  7,264  3,850  3,783 
Stockholders’ equity (adjusted) 8,751  2,754  2,074  236  1,153  193 

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).


salesforce.com inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Goodwill (Summary)

salesforce.com inc., adjusted financial ratios

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Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
Total Asset Turnover
Reported total asset turnover 0.31 0.43 0.50 0.48 0.52 0.50
Adjusted total asset turnover 0.57 0.74 0.77 0.81 0.75 0.78
Financial Leverage
Reported financial leverage 1.63 1.97 2.24 2.34 2.55 2.69
Adjusted financial leverage 3.43 6.49 6.60 43.68 7.74 35.89
Return on Equity (ROE)
Reported ROE 0.37% 7.11% 1.36% 2.40% -0.95% -6.61%
Adjusted ROE 1.44% 40.31% 6.15% 76.02% -4.11% -136.44%
Return on Assets (ROA)
Reported ROA 0.23% 3.61% 0.61% 1.02% -0.37% -2.46%
Adjusted ROA 0.42% 6.21% 0.93% 1.74% -0.53% -3.80%

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. salesforce.com inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
salesforce.com inc.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. salesforce.com inc.’s adjusted ROE improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. salesforce.com inc.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

salesforce.com inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

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Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenues 17,098  13,282  10,480  8,392  6,667  5,374 
Total assets 55,126  30,737  21,010  17,585  12,771  10,693 
Activity Ratio
Total asset turnover1 0.31 0.43 0.50 0.48 0.52 0.50
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenues 17,098  13,282  10,480  8,392  6,667  5,374 
Adjusted total assets 29,992  17,886  13,696  10,321  8,921  6,910 
Activity Ratio
Adjusted total asset turnover2 0.57 0.74 0.77 0.81 0.75 0.78

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

2020 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 17,098 ÷ 55,126 = 0.31

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 17,098 ÷ 29,992 = 0.57

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. salesforce.com inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

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Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 55,126  30,737  21,010  17,585  12,771  10,693 
Stockholders’ equity 33,885  15,605  9,388  7,500  5,003  3,975 
Solvency Ratio
Financial leverage1 1.63 1.97 2.24 2.34 2.55 2.69
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 29,992  17,886  13,696  10,321  8,921  6,910 
Adjusted stockholders’ equity 8,751  2,754  2,074  236  1,153  193 
Solvency Ratio
Adjusted financial leverage2 3.43 6.49 6.60 43.68 7.74 35.89

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

2020 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 55,126 ÷ 33,885 = 1.63

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 29,992 ÷ 8,751 = 3.43

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
salesforce.com inc.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) 126  1,110  127  180  (47) (263)
Stockholders’ equity 33,885  15,605  9,388  7,500  5,003  3,975 
Profitability Ratio
ROE1 0.37% 7.11% 1.36% 2.40% -0.95% -6.61%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income (loss) 126  1,110  127  180  (47) (263)
Adjusted stockholders’ equity 8,751  2,754  2,074  236  1,153  193 
Profitability Ratio
Adjusted ROE2 1.44% 40.31% 6.15% 76.02% -4.11% -136.44%

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

2020 Calculations

1 ROE = 100 × Net income (loss) ÷ Stockholders’ equity
= 100 × 126 ÷ 33,885 = 0.37%

2 Adjusted ROE = 100 × Net income (loss) ÷ Adjusted stockholders’ equity
= 100 × 126 ÷ 8,751 = 1.44%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. salesforce.com inc.’s adjusted ROE improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Jan 31, 2020 Jan 31, 2019 Jan 31, 2018 Jan 31, 2017 Jan 31, 2016 Jan 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) 126  1,110  127  180  (47) (263)
Total assets 55,126  30,737  21,010  17,585  12,771  10,693 
Profitability Ratio
ROA1 0.23% 3.61% 0.61% 1.02% -0.37% -2.46%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income (loss) 126  1,110  127  180  (47) (263)
Adjusted total assets 29,992  17,886  13,696  10,321  8,921  6,910 
Profitability Ratio
Adjusted ROA2 0.42% 6.21% 0.93% 1.74% -0.53% -3.80%

Based on: 10-K (filing date: 2020-03-05), 10-K (filing date: 2019-03-08), 10-K (filing date: 2018-03-09), 10-K (filing date: 2017-03-06), 10-K (filing date: 2016-03-07), 10-K (filing date: 2015-03-06).

2020 Calculations

1 ROA = 100 × Net income (loss) ÷ Total assets
= 100 × 126 ÷ 55,126 = 0.23%

2 Adjusted ROA = 100 × Net income (loss) ÷ Adjusted total assets
= 100 × 126 ÷ 29,992 = 0.42%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. salesforce.com inc.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.