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

Sherwin-Williams Co. (NYSE:SHW)

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, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in thousands)
Allowance for doubtful accounts 36,500  45,883  52,997  40,450  49,420 
Accounts receivable, gross 2,125,400  2,064,651  2,157,552  1,271,437  1,163,695 
Financial Ratio
Allowance as a percentage of accounts receivable, gross1 1.72% 2.22% 2.46% 3.18% 4.25%

Based on: 10-K (filing date: 2020-02-21), 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24).

1 2019 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for doubtful accounts ÷ Accounts receivable, gross
= 100 × 36,500 ÷ 2,125,400 = 1.72%

Financial ratio Description The company
Allowance as a percentage of accounts receivable, gross Allowance for doubtful accounts divided by the gross accounts receivable. Sherwin-Williams Co.’s allowance as a percentage of accounts receivable, gross decreased from 2017 to 2018 and from 2018 to 2019.