How much do depreciation assumptions change Salesforce, Inc.'s earnings?
Gross property and equipment, depreciation and capital spending, with an alternative useful-life calculator. Cash spending is kept separate.
Depreciation against the asset base
Gross property and equipment of $4.41B against $579.0M of depreciation and amortization implies an average life of about 7.6 years (gross assets ÷ annual charge). The charge includes amortization where the company reports them together.
| Fiscal year | Gross PP&E | Net PP&E | Depreciation & amortization | Implied life (yrs) | Capital expenditure (cash) |
|---|---|---|---|---|---|
| 2016 | $2.64B | $1.72B | $525.8M | 5.0 | $284.5M |
| 2017 | $2.99B | $1.79B | $632.0M | 4.7 | $464.0M |
| 2018 | $3.40B | $1.95B | $373.0M | 9.1 | $534.0M |
| 2019 | $3.83B | $2.05B | $411.0M | 9.3 | $595.0M |
| 2020 | $4.18B | $2.38B | $455.0M | 9.2 | $643.0M |
| 2021 | $4.41B | $2.46B | $579.0M | 7.6 | $710.0M |
10-K filed 2023-03-08 · DepreciationDepletionAndAmortization
Compare an alternative useful life
A 9-year average life gives an annual charge of $490.4M instead of $579.0M. After tax at 21%, net income would be higher by $70.0M. Cash spending ($710.0M) is unchanged.
Straight-line on gross assets, no salvage value; land and construction in progress are not separated. Treat as an order-of-magnitude comparison.