Analysis of Bad Debts
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.
Allowance for Doubtful Accounts Receivable
Based on: 10-K (reporting date: 2020-12-31), 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).
1 2020 Calculation
Allowance as a percentage of trade receivables, gross = 100 × Allowance for credit losses ÷ Trade receivables, gross
= 100 × 82 ÷ 3,396 = 2.41%
| Financial ratio | Description | The company |
|---|---|---|
| Allowance as a percentage of trade receivables, gross | Allowance for doubtful accounts divided by the gross accounts receivable. | Fidelity National Information Services Inc. allowance as a percentage of trade receivables, gross increased from 2018 to 2019 and from 2019 to 2020. |