Stock Analysis on Net
Stock Analysis on Net
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General Motors Co. (NYSE:GM)

Analysis of Bad Debts

Advanced level

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

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Allowance for doubtful accounts and notes receivable 201  211  278  303  327 
Accounts and notes receivable, gross 6,998  6,760  8,442  9,941  8,664 
Financial Ratio
Allowance as a percentage of accounts and notes receivable, gross1 2.87% 3.12% 3.29% 3.05% 3.77%

Based on: 10-K (filing date: 2020-02-05), 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-07), 10-K (filing date: 2016-02-03).

1 2019 Calculation
Allowance as a percentage of accounts and notes receivable, gross = 100 × Allowance for doubtful accounts and notes receivable ÷ Accounts and notes receivable, gross
= 100 × 201 ÷ 6,998 = 2.87%

Financial ratio Description The company
Allowance as a percentage of accounts and notes receivable, gross Allowance for doubtful accounts divided by the gross accounts receivable. General Motors Co.’s allowance as a percentage of accounts and notes receivable, gross decreased from 2017 to 2018 and from 2018 to 2019.

Allowance for Credit Losses

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Allowance for loan losses 944  911  942  843  782 
GM Financial receivables 53,900  52,844  42,671  43,632  37,333 
Financial Ratio
Allowance as a percentage of gM Financial receivables1 1.75% 1.72% 2.21% 1.93% 2.09%

Based on: 10-K (filing date: 2020-02-05), 10-K (filing date: 2019-02-06), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-07), 10-K (filing date: 2016-02-03).

1 2019 Calculation
Allowance as a percentage of gM Financial receivables = 100 × Allowance for loan losses ÷ GM Financial receivables
= 100 × 944 ÷ 53,900 = 1.75%

Financial ratio Description The company
Allowance as a percentage of gM Financial receivables Allowance for credit losses divided by the gross financing receivable. General Motors Co.’s allowance as a percentage of gM Financial receivables decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.