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.
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- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
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Allowance for Doubtful Accounts Receivable
Based on: 10-K (reporting date: 2026-04-24), 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30).
1 2026 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowances and credit losses ÷ Accounts receivable, gross
= 100 × ÷ =
The financial data indicates a divergence between the growth of gross accounts receivable and the valuation of credit loss allowances. While the total volume of outstanding receivables increased steadily over the period, the provision for doubtful accounts generally declined, leading to a contraction in the credit loss ratio.
- Gross Accounts Receivable Trend
- A consistent upward trajectory is observed in gross accounts receivable, which rose from US$ 5,703 million in April 2021 to US$ 6,833 million by April 2026. This steady increase suggests an expansion in credit sales or a shift in collection timelines over the six-year period.
- Allowance for Credit Losses Evolution
- The absolute value of allowances and credit losses demonstrated an overall downward trend, moving from US$ 241 million in 2021 to US$ 190 million in 2026. A significant reduction occurred between April 2022 and April 2023, when the allowance dropped from US$ 230 million to US$ 176 million. Although a brief increase to US$ 199 million was recorded in April 2025, the level remained substantially lower than the 2021 and 2022 benchmarks.
- Credit Loss Ratio Analysis
- The allowance as a percentage of gross accounts receivable experienced a marked decline, falling from 4.23% in 2021 to 2.78% in 2026. The most pronounced decrease occurred between April 2022 and April 2023, shifting from 3.98% to 2.85%. This trend indicates a reduction in the estimated risk of default per dollar of receivable, reflecting either improved credit quality of the customer base or a more optimistic assessment of recoverability.