Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

3M Co. (NYSE:MMM)

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.


Allowance for Doubtful Accounts Receivable

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Allowances 161  95  103  88  91 
Accounts receivable, gross 4,952  5,115  5,014  4,480  4,245 
Financial Ratio
Allowance as a percentage of accounts receivable, gross1 3.25% 1.86% 2.05% 1.96% 2.14%

Based on: 10-K (filing date: 2020-02-06), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11).

1 2019 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowances ÷ Accounts receivable, gross
= 100 × 161 ÷ 4,952 = 3.25%

Financial ratio Description The company
Allowance as a percentage of accounts receivable, gross Allowance for doubtful accounts divided by the gross accounts receivable. 3M Co.’s allowance as a percentage of accounts receivable, gross decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.