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
|May 31, 2019||May 31, 2018||May 31, 2017||May 31, 2016||May 31, 2015||May 31, 2014|
|Selected Financial Data (US$ in millions)|
|Allowances for doubtful accounts|
|Allowance as a percentage of receivables, gross1|
Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).
1 2019 Calculation
Allowance as a percentage of receivables, gross = 100 × Allowances for doubtful accounts ÷ Receivables, gross
= 100 × ÷ =
|Financial ratio||Description||The company|
|Allowance as a percentage of receivables, gross||Allowance for doubtful accounts divided by the gross accounts receivable.||FedEx Corp.’s allowance as a percentage of receivables, gross increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.|