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: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03), 10-K (reporting date: 2019-09-28), 10-K (reporting date: 2018-09-29).
1 2023 Calculation
Allowance as a percentage of current receivables, gross = 100 × Allowance for credit losses ÷ Current receivables, gross
= 100 × 115 ÷ 12,445 = 0.92%
| Financial ratio | Description | The company |
|---|---|---|
| Allowance as a percentage of current receivables, gross | Allowance for doubtful accounts divided by the gross accounts receivable. | Walt Disney Co. allowance as a percentage of current receivables, gross decreased from 2021 to 2022 and from 2022 to 2023. |