Stock Analysis on Net

Express Scripts Holding Co. (NASDAQ:ESRX)

$22.49

This company has been moved to the archive! The financial data has not been updated since October 31, 2018.

Analysis of Bad Debts

Microsoft Excel

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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Allowance for Doubtful Accounts Receivable

Microsoft Excel
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (US$ in thousands)
Allowance for doubtful accounts
Receivables, gross
Financial Ratio
Allowance as a percentage of receivables, gross1

Based on: 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31).

1 2017 Calculation
Allowance as a percentage of receivables, gross = 100 × Allowance for doubtful accounts ÷ Receivables, gross
= 100 × ÷ =


The financial data reveals notable trends concerning the allowance for doubtful accounts and gross receivables over the five-year period ending December 31, 2017.

Allowance for Doubtful Accounts
The allowance for doubtful accounts demonstrates a consistent decline from 202,200 thousand US dollars in 2013 to 75,000 thousand US dollars in 2016, followed by a slight increase to 95,300 thousand US dollars in 2017. This pattern suggests an improvement in the credit quality or collection efficiency over the period, with a minor reversal in the final year.
Receivables, Gross
Gross receivables exhibit a steady and substantial increase from 4,225,100 thousand US dollars in 2013 to 7,151,600 thousand US dollars in 2017. This upward trend indicates growing sales or revenue recognition, leading to higher outstanding amounts owed to the company.
Allowance as a Percentage of Gross Receivables
The allowance relative to gross receivables decreases sharply from 4.79% in 2013 to a low of 1.05% in 2016, before rising slightly to 1.33% in 2017. The declining ratio initially signals enhanced asset quality or credit management effectiveness despite rising receivables. The slight increase in 2017 might reflect a more conservative estimation of doubtful accounts or emerging collection concerns.

Overall, the data indicates that while gross receivables have significantly increased, the proportion of doubtful accounts has decreased, reflecting improving credit risk management. The modest uptick in the allowance during the last reported year warrants monitoring to assess whether it marks the beginning of a trend towards higher credit risk exposure.