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: 2025-03-31), 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
1 2025 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowances ÷ Accounts receivable, gross
= 100 × ÷ =
- Allowances
- The allowances exhibit a fluctuating trend over the observed periods. Starting at 443 thousand US dollars in 2020, the value decreased to 350 thousand in 2021 and remained stable in 2022. However, from 2023 onwards, there is a significant increase, with allowances rising to 1,300 thousand in 2023, slightly decreasing to 1,200 thousand in 2024, and then increasing again to 1,600 thousand in 2025.
- Accounts receivable, gross
- The gross accounts receivable show variability with an overall upward trend between 2021 and 2023. The figure decreased from 592,998 thousand in 2020 to 553,112 thousand in 2021, followed by a moderate increase to 579,783 thousand in 2022. A more pronounced increase is observed in 2023, reaching 764,500 thousand. Subsequently, the accounts receivable slightly decline to 680,900 thousand in 2024 but then increase again to 772,700 thousand in 2025.
- Allowance as a percentage of accounts receivable, gross
- This ratio remained stable at 0.06-0.07% from 2020 to 2022, reflecting a relatively low and consistent allowance relative to accounts receivable. However, starting in 2023, the ratio more than doubles to 0.17%, followed by further increases to 0.18% in 2024 and 0.21% in 2025. This indicates a growing proportion of allowances relative to gross accounts receivable over recent years.
- Summary
- Overall, the data indicate increasing allowances in both absolute terms and as a percentage of gross accounts receivable from 2023 onwards. While gross accounts receivable generally increased, the sharper rise in allowances and their proportion suggests a more cautious approach to potential credit risks or collection issues. This trend may imply heightened concerns about receivables collectability or changes in credit policies starting in 2023.