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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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Allowance for Doubtful Accounts Receivable
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Allowance as a percentage of trade receivables, gross = 100 × Allowance for doubtful accounts ÷ Trade receivables, gross
= 100 × ÷ =
- Allowance for doubtful accounts
- The allowance for doubtful accounts showed an overall fluctuating trend over the observed periods. It increased from 24 million in 2020 to a peak of 37 million in 2022, then decreased to 29 million in 2023, and further declined to 24 million in 2024, returning to the initial level reported in 2020.
- Trade receivables, gross
- Gross trade receivables exhibited significant changes, nearly doubling from 2,139 million in 2020 to 4,243 million in 2021. This high level was maintained in 2022 at 4,318 million, but then the figure fell sharply to 3,224 million in 2023, followed by a moderate increase to 3,550 million in 2024.
- Allowance as a percentage of trade receivables, gross
- The allowance for doubtful accounts as a percentage of gross trade receivables demonstrated a declining trend across the periods. It decreased from 1.12% in 2020 to 0.82% in 2021 and remained relatively stable around 0.86% and 0.9% in 2022 and 2023, respectively, before dropping further to 0.68% in 2024. This indicates an improving relative provision for doubtful accounts despite fluctuations in absolute numbers.