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
Allowance for Credit Losses

	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
Selected Financial Data (US$ in millions)
Allowance for doubtful trade receivables	78)	94)	59)	72)	68)	64)
Trade receivables, gross	2,239)	2,020)	1,695)	2,086)	1,783)	1,961)
Financial Ratio
Allowance as a percentage of trade receivables, gross¹	3.48%	4.65%	3.48%	3.45%	3.81%	3.26%

Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).

¹ 2017 Calculation
Allowance as a percentage of trade receivables, gross = 100 × Allowance for doubtful trade receivables ÷ Trade receivables, gross
= 100 × 78 ÷ 2,239 = 3.48%

Financial ratio	Description	The company
Allowance as a percentage of trade receivables, gross	Allowance for doubtful accounts divided by the gross accounts receivable.	Monsanto Co. allowance as a percentage of trade receivables, gross increased from 2015 to 2016 but then slightly decreased from 2016 to 2017 not reaching 2015 level.

	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013	Aug 31, 2012
Selected Financial Data (US$ in millions)
Allowance for credit losses	277)	228)	120)	125)	104)	141)
Long-term customer receivables, gross	675)	488)	276)	261)	216)	297)
Financial Ratio
Allowance as a percentage of long-term customer receivables, gross¹	41.04%	46.72%	43.48%	47.89%	48.15%	47.47%

Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).

¹ 2017 Calculation
Allowance as a percentage of long-term customer receivables, gross = 100 × Allowance for credit losses ÷ Long-term customer receivables, gross
= 100 × 277 ÷ 675 = 41.04%

Financial ratio	Description	The company
Allowance as a percentage of long-term customer receivables, gross	Allowance for credit losses divided by the gross financing receivable.	Monsanto Co. allowance as a percentage of long-term customer receivables, gross increased from 2015 to 2016 but then decreased significantly from 2016 to 2017.

Monsanto Co. (NYSE:MON)

Analysis of Bad Debts

Allowance for Doubtful Accounts Receivable

Allowance for Credit Losses