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.
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- Statement of Comprehensive Income
- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Analysis of Debt
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Allowance for Doubtful Accounts Receivable
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Allowance as a percentage of receivables, gross = 100 × Allowance for doubtful accounts ÷ Receivables, gross
= 100 × ÷ =
- Allowance for doubtful accounts
- The allowance for doubtful accounts exhibited fluctuations over the five-year period. It increased from 2,867 thousand US dollars in 2020 to a peak of 3,692 thousand in 2021, decreased to 2,290 thousand in 2022, and then steadily rose to 4,553 thousand in 2023 and further to 5,808 thousand in 2024. Overall, there was a notable upward trend from 2022 onwards, indicating a growing provision for potential uncollectible receivables in the most recent years.
- Receivables, gross
- The gross receivables showed a clear upward trajectory throughout the period analyzed. Starting at 345,009 thousand US dollars in 2020, the figure remained relatively stable into 2021 at 346,386 thousand before experiencing substantial increases in 2022, 2023, and 2024. Notably, gross receivables surged to 491,735 thousand in 2022, 504,532 thousand in 2023, and reached the highest level of 710,447 thousand by 2024, indicating expanding credit sales or extended credit terms.
- Allowance as a percentage of receivables, gross
- This ratio showed variability across the years. Initially, the allowance represented 0.83% of gross receivables in 2020, climbed to 1.07% in 2021, then fell sharply to 0.47% in 2022. Subsequently, it rose again to 0.9% in 2023 before slightly decreasing to 0.82% in 2024. The fluctuations suggest adjustments in the estimation of uncollectible amounts relative to the size of the receivables, with the percentage generally stabilizing close to the 0.8 - 0.9% range in the most recent years despite the growth in absolute receivables and allowance values.