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Microsoft Excel LibreOffice Calc

Intuitive Surgical Inc. (ISRG)


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 Sales Returns and Doubtful Accounts

The allowance for sales returns is based on Intuitive Surgical’s estimates of potential future returns of certain products and other allowances related to current period product revenue. Intuitive Surgical analyzes historical returns, current economic trends, and changes in customer demand and acceptance of Intuitive Surgical’s products. The allowance for doubtful accounts is based on Intuitive Surgical’s assessment of the collectability of customer accounts. Intuitive Surgical regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay.

Source: 10-K (filing date: 2019-02-04).


Allowance for Doubtful Accounts Receivable

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in thousands)
Allowance for doubtful accounts and sales returns hidden hidden hidden hidden hidden
Accounts receivable, gross hidden hidden hidden hidden hidden
Ratio
Allowance as a percentage of accounts receivable, gross1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-04), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-02), 10-K (filing date: 2015-02-06).

2018 Calculations

1 Allowance as a percentage of accounts receivable, gross = 100 × Allowance for doubtful accounts and sales returns ÷ 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. Intuitive Surgical Inc.’s allowance as a percentage of accounts receivable, gross increased from 2016 to 2017 and from 2017 to 2018.

Allowance for Credit Losses

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in thousands)
Allowance for credit loss hidden hidden hidden hidden hidden
Investment in sales-type leases, including allowance for credit loss hidden hidden hidden hidden hidden
Ratio
Allowance as a percentage of investment in sales-type leases, including allowance for credit loss1 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2019-02-04), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-06), 10-K (filing date: 2016-02-02), 10-K (filing date: 2015-02-06).

2018 Calculations

1 Allowance as a percentage of investment in sales-type leases, including allowance for credit loss = 100 × Allowance for credit loss ÷ Investment in sales-type leases, including allowance for credit loss
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Allowance as a percentage of investment in sales-type leases, including allowance for credit loss Allowance for credit losses divided by the gross financing receivable. Intuitive Surgical Inc.’s allowance as a percentage of investment in sales-type leases, including allowance for credit loss increased from 2016 to 2017 but then slightly declined from 2017 to 2018.