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.
Paying user area
Try for free
Lumentum Holdings Inc. pages available for free this week:
- Cash Flow Statement
- Analysis of Reportable Segments
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2015
- Return on Equity (ROE) since 2015
- Price to Earnings (P/E) since 2015
- Price to Book Value (P/BV) since 2015
- Analysis of Revenues
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Lumentum Holdings Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Allowance for Doubtful Accounts Receivable
Based on: 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27).
1 2025 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for uncollectible accounts receivable ÷ Accounts receivable, gross
= 100 × ÷ =
The allowance for uncollectible accounts receivable demonstrates significant fluctuation over the observed period. Initially, a substantial decrease is noted, followed by a period of unavailable information, and then a marked increase. This analysis details these trends and their relationship to gross accounts receivable.
- Allowance for Uncollectible Accounts Receivable (USD in thousands)
- The allowance began at 1,800 in 2020 and decreased dramatically to 400 in 2021. Information is unavailable for 2022 and 2023. In 2024, the allowance further decreased to 200, representing the lowest value in the observed period. However, a substantial increase to 3,500 is observed in 2025.
- Gross Accounts Receivable (USD in thousands)
- Gross accounts receivable experienced a decrease from 235,300 in 2020 to 213,200 in 2021. An increase to 262,000 was recorded in 2022, followed by a slight decrease to 246,100 in 2023. A notable decrease to 194,900 occurred in 2024, and a subsequent increase to 253,500 is seen in 2025.
- Allowance as a Percentage of Gross Accounts Receivable
- In 2020, the allowance represented 0.76% of gross accounts receivable. This percentage decreased significantly to 0.19% in 2021. The percentage is unavailable for 2022 and 2023. In 2024, the percentage reached a low of 0.10%. However, in 2025, the percentage increased substantially to 1.38%, indicating a larger proportion of receivables are considered potentially uncollectible.
The most striking observation is the increase in both the absolute allowance amount and the allowance percentage in 2025. This suggests a potential deterioration in the collectability of accounts receivable, or a more conservative approach to estimating bad debts. The decrease in the allowance in 2021 coincided with a decrease in gross accounts receivable, but the subsequent low allowance in 2024 occurred alongside a further decrease in gross receivables. The significant jump in 2025, despite an increase in gross receivables, warrants further investigation to understand the underlying factors contributing to this change.