Analysis of Bad Debts
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
Based on: 10-K (filing date: 2020-10-22), 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30).
1 2020 Calculation
Allowance as a percentage of receivables, gross = 100 × Allowances for client receivables ÷ Receivables, gross
= 100 × 40,277 ÷ 7,232,387 = 0.56%
|Financial ratio||Description||The company|
|Allowance as a percentage of receivables, gross||Allowance for doubtful accounts divided by the gross accounts receivable.||Accenture PLC’s allowance as a percentage of receivables, gross decreased from 2018 to 2019 and from 2019 to 2020.|