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Microsoft Excel LibreOffice Calc


Analysis of Bad Debts

Difficulty: Advanced

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.


Receivables Accounting Policy

Trade Receivables

BD grants credit to customers in the normal course of business and the resulting trade receivables are stated at their net realizable value. The allowance for doubtful accounts represents BD's estimate of probable credit losses relating to trade receivables and is determined based on historical experience and other specific account data. Amounts are written off against the allowances for doubtful accounts when BD determines that a customer account is uncollectible.

Source: 10-K (filing date: 2018-11-21).


Allowance for Doubtful Accounts Receivable

Microsoft Excel LibreOffice Calc
Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015 Sep 30, 2014 Sep 30, 2013
Selected Financial Data (USD $ in millions)
Allowance for doubtful accounts hidden hidden hidden hidden hidden hidden
Trade receivables, gross hidden hidden hidden hidden hidden hidden
Ratio
Allowance as a percentage of trade receivables, gross1 hidden hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-26), 10-K (filing date: 2013-11-27).

2018 Calculations

1 Allowance as a percentage of trade receivables, gross = 100 × Allowance for doubtful accounts ÷ Trade receivables, gross
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Allowance as a percentage of trade receivables, gross Allowance for doubtful accounts divided by the gross accounts receivable. Becton, Dickinson & Co.'s allowance as a percentage of trade receivables, gross declined from 2016 to 2017 but then slightly increased from 2017 to 2018.