Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Nike Inc. (NYSE:NKE)

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

Microsoft Excel LibreOffice Calc
May 31, 2020 May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015
Selected Financial Data (US$ in millions)
Allowance for uncollectible accounts receivable 214  30  30  19  43  78 
Accounts receivable, gross 2,963  4,302  3,528  3,696  3,284  3,436 
Financial Ratio
Allowance as a percentage of accounts receivable, gross1 7.22% 0.70% 0.85% 0.51% 1.31% 2.27%

Based on: 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), 10-K (filing date: 2015-07-23).

1 2020 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for uncollectible accounts receivable ÷ Accounts receivable, gross
= 100 × 214 ÷ 2,963 = 7.22%

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 decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.