Stock Analysis on Net

Phillips 66 (NYSE:PSX)

$22.49

This company has been moved to the archive! The financial data has not been updated since February 21, 2020.

Analysis of Bad Debts

Microsoft Excel

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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Allowance for Doubtful Accounts Receivable

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Allowances
Accounts and notes receivable, gross
Financial Ratio
Allowance as a percentage of accounts and notes receivable, gross1

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 2019 Calculation
Allowance as a percentage of accounts and notes receivable, gross = 100 × Allowances ÷ Accounts and notes receivable, gross
= 100 × ÷ =


Allowances
The allowances decreased significantly from 55 million US dollars in 2015 to 22 million in 2018, indicating a reduction in estimated uncollectible accounts over this period. However, in 2019, there was a noticeable increase to 41 million US dollars, suggesting a reversal or adjustment in the previous downward trend.
Accounts and notes receivable, gross
The gross accounts and notes receivable exhibited a general upward trend, rising from 4,466 million US dollars in 2015 to 7,417 million in 2019. There was consistent growth year-over-year with a minor decline in 2018, where the value dropped from 6,453 million in 2017 to 5,436 million. This indicates an overall increase in the amount of receivables held over the five-year period, with a temporary dip in 2018.
Allowance as a percentage of accounts and notes receivable, gross
This percentage declined steadily from 1.23% in 2015 to a low of 0.40% in 2018, demonstrating improved credit quality or more conservative allowance estimates relative to receivables. In 2019, there was a slight increase to 0.55%, aligning with the rise in absolute allowance amount, indicating a modest increase in the proportion of doubtful accounts relative to total receivables.