Stock Analysis on Net
Stock Analysis on Net

Nike Inc. (NYSE:NKE)

Analysis of Bad Debts

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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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May 31, 2021 May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016
Selected Financial Data (US$ in millions)
Allowance for uncollectible accounts receivable 93  214  30  30  19  43 
Accounts receivable, gross 4,556  2,963  4,302  3,528  3,696  3,284 
Financial Ratio
Allowance as a percentage of accounts receivable, gross1 2.04% 7.22% 0.70% 0.85% 0.51% 1.31%

Based on: 10-K (filing date: 2021-07-20), 10-K (filing date: 2020-07-24), 10-K (filing date: 2019-07-23), 10-K (filing date: 2018-07-25), 10-K (filing date: 2017-07-20), 10-K (filing date: 2016-07-21).

1 2021 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for uncollectible accounts receivable ÷ Accounts receivable, gross
= 100 × 93 ÷ 4,556 = 2.04%

Financial ratio Description The company
Allowance as a percentage of accounts receivable, gross Allowance for doubtful accounts divided by the gross accounts receivable. Nike Inc.’s allowance as a percentage of accounts receivable, gross increased from 2019 to 2020 but then slightly decreased from 2020 to 2021 not reaching 2019 level.