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Microsoft Excel LibreOffice Calc

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

CSX maintains an allowance for doubtful accounts on uncollectible amounts related to freight receivables, government reimbursement receivables, claims for damages and other various receivables. The allowance is based upon the creditworthiness of customers, historical experience, the age of the receivable and current market and economic conditions. Uncollectible amounts are charged against the allowance account. Allowance for doubtful accounts of $26 million and $33 million is included in the consolidated balance sheets as of December 2017 and December 2016, respectively.

Source: 10-K (filing date: 2018-02-07).

Allowance for Doubtful Accounts Receivable

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 30, 2016 Dec 25, 2015 Dec 26, 2014 Dec 27, 2013
Selected Financial Data (USD $ in millions)
Allowance for doubtful accounts hidden hidden hidden hidden hidden
Accounts receivable, gross hidden hidden hidden hidden hidden
Allowance as a percentage of accounts receivable, gross1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-07), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11), 10-K (filing date: 2014-02-12).

2017 Calculations

1 Allowance as a percentage of accounts receivable, gross = 100 × Allowance for doubtful accounts ÷ Accounts receivable, gross
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Allowance as a percentage of accounts receivable, gross Allowance for doubtful accounts divided by the gross accounts receivable. CSX Corp.’s allowance as a percentage of accounts receivable, gross declined from 2015 to 2016 and from 2016 to 2017.