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: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27), 10-K (reporting date: 2018-07-28).
1 2023 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for credit loss ÷ Accounts receivable, gross
= 100 × 85 ÷ 5,939 = 1.43%
| Financial ratio | Description | The company |
|---|---|---|
| Allowance as a percentage of accounts receivable, gross | Allowance for doubtful accounts divided by the gross accounts receivable. | Cisco Systems Inc. allowance as a percentage of accounts receivable, gross decreased from 2021 to 2022 but then slightly increased from 2022 to 2023. |
Allowance for Credit Losses
Based on: 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27), 10-K (reporting date: 2018-07-28).
1 2023 Calculation
Allowance as a percentage of gross financing receivables less unearned income = 100 × Allowance for credit loss ÷ Gross financing receivables less unearned income
= 100 × 72 ÷ 6,837 = 1.05%
| Financial ratio | Description | The company |
|---|---|---|
| Allowance as a percentage of gross financing receivables less unearned income | Allowance for credit losses divided by the gross financing receivable. | Cisco Systems Inc. allowance as a percentage of gross financing receivables less unearned income increased from 2021 to 2022 but then decreased significantly from 2022 to 2023. |