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: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28).
1 2025 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance ÷ Accounts receivable, gross
= 100 × ÷ =
- Allowance
- The allowance shows moderate fluctuations over the analyzed periods. It decreased slightly from 5,465 thousand USD in mid-2020 to 5,255 thousand USD in mid-2021, then increased to a peak of 6,496 thousand USD by mid-2025. Overall, the allowance appears relatively stable with some upward pressure in the most recent year.
- Accounts Receivable, Gross
- Gross accounts receivable exhibited notable volatility, initially increasing sharply from approximately 2,103,000 thousand USD in mid-2020 to 4,319,000 thousand USD in mid-2022. After this peak, the balance declined significantly to 2,525,000 thousand USD in mid-2024 before rising again to 3,385,000 thousand USD in mid-2025. This indicates fluctuating receivables levels with a pattern of rapid growth followed by contraction and partial recovery.
- Allowance as a Percentage of Accounts Receivable, Gross
- The ratio of allowance to gross accounts receivable shows a generally declining trend from 0.26% in mid-2020 to a low of 0.13% in mid-2022, indicating the allowance was shrinking relative to receivables during the receivables’ peak growth. Subsequently, the ratio increased again, reaching 0.21% in mid-2024, before a slight decrease to 0.19% in mid-2025. This suggests that the proportion of allowance relative to receivables adjusted in response to fluctuations in receivables balances, with a generally low and stable allowance ratio in recent years.