Stock Analysis on Net
Stock Analysis on Net
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Qualcomm Inc. (NASDAQ:QCOM)

Analysis of Bad Debts

Advanced level

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.


Accounting Policy on Receivables

Allowances for Doubtful Accounts

Qualcomm maintains allowances for doubtful accounts for estimated losses resulting from receivables that will not be collected. Qualcomm determines the allowance based on customer credit-worthiness, historical payment experience, the age of outstanding receivables and collateral, to the extent applicable.

Source: 10-K (filing date: 2019-11-06).


Allowance for Doubtful Accounts Receivable

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Sep 29, 2019 Sep 30, 2018 Sep 24, 2017 Sep 25, 2016 Sep 27, 2015 Sep 28, 2014
Selected Financial Data (US$ in millions)
Allowances for doubtful accounts 47  56  11 
Accounts receivable, trade, gross 1,093  2,904  3,587  2,195  1,947  2,367 
Financial Ratio
Allowance as a percentage of accounts receivable, trade, gross1 4.30% 1.93% 0.31% 0.05% 0.31% 0.21%

Based on: 10-K (filing date: 2019-11-06), 10-K (filing date: 2018-11-07), 10-K (filing date: 2017-11-01), 10-K (filing date: 2016-11-02), 10-K (filing date: 2015-11-04), 10-K (filing date: 2014-11-05).

1 2019 Calculation
Allowance as a percentage of accounts receivable, trade, gross = 100 × Allowances for doubtful accounts ÷ Accounts receivable, trade, gross
= 100 × 47 ÷ 1,093 = 4.30%

Financial ratio Description The company
Allowance as a percentage of accounts receivable, trade, gross Allowance for doubtful accounts divided by the gross accounts receivable. Qualcomm Inc.’s allowance as a percentage of accounts receivable, trade, gross increased from 2017 to 2018 and from 2018 to 2019.