Analysis of Bad Debts
Allowance for doubtful accounts receivable (bad debts) is a contra account which reduce the balance of the company gross accounts receivable. The relationship between the allowance and the balance in receivables should be relatively constant unless there is a change in the economy overall or a change in customer base.
Allowance for Doubtful Accounts Receivable
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Allowance as a percentage of receivables before allowance for credit losses = 100 × Allowance for credit losses ÷ Receivables before allowance for credit losses
= 100 × 28 ÷ 11,066 = 0.25%
| Financial ratio | Description | The company |
|---|---|---|
| Allowance as a percentage of receivables before allowance for credit losses | Allowance for doubtful accounts divided by the gross accounts receivable. | Valero Energy Corp. allowance as a percentage of receivables before allowance for credit losses decreased from 2021 to 2022 and from 2022 to 2023. |