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
Allowance for Credit Losses

	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
Selected Financial Data (US$ in millions)
Allowance for doubtful accounts	37)	25)	23)	46)	31)	39)
Accounts receivable, gross	3,518)	4,126)	4,002)	3,432)	2,988)	3,302)
Financial Ratio
Allowance as a percentage of accounts receivable, gross¹	1.05%	0.61%	0.57%	1.34%	1.04%	1.18%

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

¹ 2023 Calculation
Allowance as a percentage of accounts receivable, gross = 100 × Allowance for doubtful accounts ÷ Accounts receivable, gross
= 100 × 37 ÷ 3,518 = 1.05%

Financial ratio	Description	The company
Allowance as a percentage of accounts receivable, gross	Allowance for doubtful accounts divided by the gross accounts receivable.	Hewlett Packard Enterprise Co. allowance as a percentage of accounts receivable, gross increased from 2021 to 2022 and from 2022 to 2023.

	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
Selected Financial Data (US$ in millions)
Allowance for credit losses	243)	325)	228)	154)	131)	120)
Financing receivables, gross	8,814)	8,359)	9,198)	9,058)	8,652)	8,256)
Financial Ratio
Allowance as a percentage of financing receivables, gross¹	2.76%	3.89%	2.48%	1.70%	1.51%	1.45%

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

¹ 2023 Calculation
Allowance as a percentage of financing receivables, gross = 100 × Allowance for credit losses ÷ Financing receivables, gross
= 100 × 243 ÷ 8,814 = 2.76%

Financial ratio	Description	The company
Allowance as a percentage of financing receivables, gross	Allowance for credit losses divided by the gross financing receivable.	Hewlett Packard Enterprise Co. allowance as a percentage of financing receivables, gross increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Hewlett Packard Enterprise Co. (NYSE:HPE)

Analysis of Bad Debts

Allowance for Doubtful Accounts Receivable

Allowance for Credit Losses