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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Allowance for Doubtful Accounts Receivable
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30).
1 2025 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for credit losses ÷ Accounts receivable, gross
= 100 × ÷ =
- Allowance for Credit Losses
- The allowance for credit losses has exhibited a generally increasing trend over the analyzed periods. Starting at 11,822 thousand US dollars as of June 30, 2020, the amount grew to 18,036 thousand by June 30, 2021, then further increased to 20,631 thousand in 2022. A more pronounced rise occurred on June 30, 2023, reaching 33,632 thousand. Subsequent periods show a slight decrease and stabilization around 32,782 thousand in 2024 and a modest increase to 34,015 thousand by 2025.
- Accounts Receivable, Gross
- Gross accounts receivable rose significantly across the six-year span. From 1,119,235 thousand US dollars at the midpoint of 2020, it increased steadily to 1,323,515 thousand in 2021. A sharp rise was noted in 2022, reaching 1,832,508 thousand, followed by a slight decline to 1,786,993 thousand in 2023. Afterward, the figure grew again, amounting to 1,865,823 thousand in 2024, and ultimately reaching its highest value at 2,297,930 thousand in 2025. This pattern suggests expansion in sales or credit extended to customers, with minor fluctuations in 2023.
- Allowance as a Percentage of Accounts Receivable, Gross
- The allowance for credit losses as a percentage of gross accounts receivable displays variability indicative of changes in credit risk assessment or collection efficiency. Initially, the percentage increased from 1.06% in 2020 to 1.36% in 2021, signaling more conservative provisioning relative to receivables. It then decreased to 1.13% in 2022 before rising sharply to 1.88% in 2023. The ratio moderately declined to 1.76% in 2024 and subsequently to 1.48% in 2025. Overall, the percentage fluctuated but maintained an upward slope compared to the beginning, possibly reflecting adjustments in expectations of credit losses aligned with market or customer conditions.