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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- Statement of Comprehensive Income
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2013
- Return on Assets (ROA) since 2013
- Total Asset Turnover since 2013
- Price to Operating Profit (P/OP) since 2013
- Price to Sales (P/S) since 2013
- Analysis of Debt
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Allowance for Doubtful Accounts Receivable
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Allowance as a percentage of trade and other receivables, gross = 100 × Allowance for credit losses ÷ Trade and other receivables, gross
= 100 × ÷ =
- Allowance for credit losses
- The allowance for credit losses exhibited an increasing trend from 2020 to 2021, rising from 7 million USD to 14 million USD. Subsequently, it declined to 11 million USD in 2022 and continued decreasing to 9 million USD in 2023. There was a slight increase to 11 million USD in 2024, followed by a small reduction to 10 million USD in 2025. Overall, the allowance experienced fluctuations but demonstrated a general decrease after the peak in 2021.
- Trade and other receivables, gross
- The gross trade and other receivables showed a consistent upward trajectory throughout the period. Starting at 884 million USD in 2020, receivables increased each year, reaching 1,047 million USD in 2021, 1,253 million USD in 2022, 1,579 million USD in 2023, 1,650 million USD in 2024, and finally 1,960 million USD in 2025. This steady growth implies expanding business activity or credit sales over time.
- Allowance as a percentage of trade and other receivables, gross
- This ratio started at a low of 0.76% in 2020 and increased noticeably to 1.36% in 2021, reflecting a heightened caution or recognition of potential credit losses. Thereafter, it decreased substantially each year, dropping to 0.86% in 2022, 0.54% in 2023, slightly rising to 0.67% in 2024, and further declining to 0.51% in 2025. The decreasing trend in the allowance percentage relative to gross receivables suggests improved credit quality or more effective receivables management over the later years.
- Summary of trends and insights
- Overall, the data reveals expanding gross receivables, indicating growth in outstanding credit extended. The allowance for credit losses peaked in 2021 but has generally declined subsequently, reflecting potential improvements in credit risk assessment or collection processes. The allowance as a percentage of receivables initially increased but then steadily declined after 2021, corroborating a positive trend in receivables quality despite the increase in absolute receivables volume. These patterns suggest enhanced credit management efficiency and possibly stronger customer payment performance in recent years.