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

Philip Morris International Inc. (NYSE:PM)

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
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Allowances 23  20  25  30  42 
Trade receivables, gross 2,928  3,100  2,975  3,768  3,541 
Financial Ratio
Allowance as a percentage of trade receivables, gross1 0.79% 0.65% 0.84% 0.80% 1.19%

Based on: 10-K (filing date: 2021-02-09), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14).

1 2020 Calculation
Allowance as a percentage of trade receivables, gross = 100 × Allowances ÷ Trade receivables, gross
= 100 × 23 ÷ 2,928 = 0.79%

Financial ratio Description The company
Allowance as a percentage of trade receivables, gross Allowance for doubtful accounts divided by the gross accounts receivable. Philip Morris International Inc.’s allowance as a percentage of trade receivables, gross decreased from 2018 to 2019 but then increased from 2019 to 2020 not reaching 2018 level.