Stock Analysis on Net

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

$22.49

This company has been moved to the archive! The financial data has not been updated since July 9, 2020.

Analysis of Bad Debts

Microsoft Excel

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

Microsoft Excel
Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014
Selected Financial Data (US$ in millions)
Allowance for doubtful accounts
Accounts receivable, gross
Financial Ratio
Allowance as a percentage of accounts receivable, gross1

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

1 2019 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for doubtful accounts ÷ Accounts receivable, gross
= 100 × ÷ =


Allowance for doubtful accounts
The allowance for doubtful accounts shows a declining trend from 2014 to 2018, decreasing from $173 million to $75 million. In 2019, there is a slight increase to $95 million. This overall decline suggests improving credit risk management or reduced anticipated credit losses over the period, although the uptick in 2019 may indicate a cautious adjustment or changes in credit policy.
Accounts receivable, gross
The gross accounts receivable values fluctuate during the period. There is a significant increase from $3,391 million in 2014 to a peak of $7,021 million in 2015. This is followed by a decrease and relative stabilization around $6,600 to $6,700 million in 2016 through 2018. A rise is observed again in 2019, reaching $7,321 million. These changes could reflect variations in sales volume, credit terms, or collection cycle dynamics.
Allowance as a percentage of accounts receivable, gross
This ratio demonstrates a consistent downward trend, starting at 5.1% in 2014 and declining sharply to 1.13% in 2018. In 2019, there is a slight increase to 1.3%. The declining percentage indicates improved quality of receivables or more conservative provisioning relative to the size of receivables over time. The minor increase in the last year may reflect adjustments in credit risk assessment or economic conditions.