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.
Allowance for Doubtful Accounts Receivable
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 2024 Calculation
Allowance as a percentage of gross accounts receivable = 100 × Allowance for expected credit losses ÷ Gross accounts receivable
= 100 × 71 ÷ 9,414 = 0.75%
| Financial ratio | Description | The company |
|---|---|---|
| Allowance as a percentage of gross accounts receivable | Allowance for doubtful accounts divided by the gross accounts receivable. | Dell Technologies Inc. allowance as a percentage of gross accounts receivable decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level. |
Allowance for Credit Losses
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
1 2024 Calculation
Allowance as a percentage of financing receivables, gross = 100 × Allowance for financing receivable losses ÷ Financing receivables, gross
= 100 × 170 ÷ 10,690 = 1.59%
| Financial ratio | Description | The company |
|---|---|---|
| Allowance as a percentage of financing receivables, gross | Allowance for credit losses divided by the gross financing receivable. | Dell Technologies Inc. allowance as a percentage of financing receivables, gross increased from 2022 to 2023 but then decreased significantly from 2023 to 2024. |