Stock Analysis on Net

DuPont de Nemours Inc. (NYSE:DD)

$22.49

This company has been moved to the archive! The financial data has not been updated since February 14, 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
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Allowance for doubtful receivables
Accounts and notes receivable, trade, gross
Financial Ratio
Allowance as a percentage of accounts and notes receivable, trade, gross1

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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


Allowance for Doubtful Receivables
The allowance for doubtful receivables exhibited an initial increasing trend from 94 million USD in 2015 to 191 million USD in 2018, indicating a rising expectation of uncollectible accounts. However, this figure sharply decreased to 9 million USD in 2019, suggesting a significant reassessment or improvement in receivables quality by that year.
Accounts and Notes Receivable, Trade, Gross
The gross trade receivables showed substantial growth from 4172 million USD in 2015 to a peak of 12567 million USD in 2018, signaling an expansion in trade credit extended or increased sales on credit. Nevertheless, a marked decline to 3016 million USD in 2019 occurred, which might imply tighter credit policies, improved collections, or decreased sales on credit.
Allowance as a Percentage of Accounts and Notes Receivable, Trade, Gross
This ratio declined significantly over the period, starting at 2.25% in 2015, decreasing slightly to 2.3% in 2016, then dropping more sharply to 1.11% in 2017 and 1.52% in 2018, before reaching a low of 0.3% in 2019. This trend suggests an improving quality of receivables and/or more optimistic recoverability expectations over time, especially notable in 2019.
Overall Observations
The data indicates that while the amount of gross receivables increased notably until 2018, the company maintained or improved its assessment of collectibility risks, as reflected by the reduction in the allowance percentage. The abrupt decrease in both gross receivables and allowance in 2019 points to a substantial change in the company's receivables management or credit risk environment, potentially reflecting improved collections, policy shifts, or changes in sales structure.