Stock Analysis on Net

Zoetis Inc. (NYSE:ZTS)

$22.49

This company has been moved to the archive! The financial data has not been updated since May 2, 2024.

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, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Allowance for doubtful accounts
Accounts receivable, gross
Financial Ratio
Allowance as a percentage of accounts receivable, gross1

Based on: 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), 10-K (reporting date: 2019-12-31).

1 2023 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for doubtful accounts ÷ Accounts receivable, gross
= 100 × ÷ =


Allowance for Doubtful Accounts
The allowance for doubtful accounts has exhibited a fluctuating but generally declining trend over the five-year period. It decreased from 21 million USD in 2019 to 18 million USD in 2023, with a noted low of 17 million USD in 2021 before slightly increasing again in 2022.
Accounts Receivable, Gross
Gross accounts receivable have shown consistent growth throughout the period, increasing from 1107 million USD in 2019 to 1322 million USD in 2023. This represents a gradual upward trajectory year over year, indicating expanding credit sales or receivables volume within the company.
Allowance as a Percentage of Accounts Receivable, Gross
The allowance for doubtful accounts as a percentage of gross accounts receivable has steadily decreased, starting at 1.9% in 2019 and reaching 1.36% in 2023. This decline suggests improvements in credit quality or collection efficiency, as the provision for potential uncollectible accounts is becoming a smaller fraction of the total receivables.
Overall Assessment
The data suggests a positive trend in managing credit risk and receivables. Despite an increase in gross accounts receivable, the relatively stable or slightly declining allowance for doubtful accounts, both in absolute terms and as a percentage, points to effective credit policies or improving customer payment behavior. The company appears to retain increasing receivables without a corresponding rise in doubtful amounts, which may signal strong financial health in this area.