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Microsoft Excel LibreOffice Calc

Adobe Inc. (ADBE)


Analysis of Bad Debts

Difficulty: Advanced

Allowance for doubtful accounts receivable (bad debts) is a contra account which reduce the balance of the company’s 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.


Receivables Accounting Policy

Allowance for Doubtful Accounts

Adobe maintains an allowance for doubtful accounts which reflects the best estimate of potentially uncollectible trade receivables. The allowance is based on both specific and general reserves. Adobe regularly reviews the trade receivables allowances by considering such factors as historical experience, credit-worthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability to pay and Adobe specifically reserves for those deemed uncollectible.

Source: 10-K (filing date: 2019-01-25).


Allowance for Doubtful Accounts Receivable

Microsoft Excel LibreOffice Calc
Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014 Nov 29, 2013
Selected Financial Data (US$ in thousands)
Allowances for doubtful accounts hidden hidden hidden hidden hidden hidden
Trade receivables, gross hidden hidden hidden hidden hidden hidden
Ratio
Allowance as a percentage of trade receivables, gross1 hidden hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).

2018 Calculations

1 Allowance as a percentage of trade receivables, gross = 100 × Allowances for doubtful accounts ÷ Trade receivables, gross
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Allowance as a percentage of trade receivables, gross Allowance for doubtful accounts divided by the gross accounts receivable. Adobe Inc.’s allowance as a percentage of trade receivables, gross increased from 2016 to 2017 and from 2017 to 2018.