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: 2024-12-31), 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).
1 2024 Calculation
Allowance as a percentage of receivables, gross = 100 × Allowances for doubtful receivables ÷ Receivables, gross
= 100 × 84 ÷ 14,807 = 0.57%
| Financial ratio | Description | The company |
|---|---|---|
| Allowance as a percentage of receivables, gross | Allowance for doubtful accounts divided by the gross accounts receivable. | Ford Motor Co. allowance as a percentage of receivables, gross decreased from 2022 to 2023 but then increased from 2023 to 2024 not reaching 2022 level. |
Allowance for Credit Losses
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Allowance as a percentage of recorded investment in finance receivables = 100 × Allowance for credit losses ÷ Recorded investment in finance receivables
= 100 × 864 ÷ 112,500 = 0.77%
| Financial ratio | Description | The company |
|---|---|---|
| Allowance as a percentage of recorded investment in finance receivables | Allowance for credit losses divided by the gross financing receivable. | Ford Motor Co. allowance as a percentage of recorded investment in finance receivables decreased from 2022 to 2023 and from 2023 to 2024. |