Stock Analysis on Net

United Parcel Service Inc. (NYSE:UPS)

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.


Allowance for Doubtful Accounts Receivable

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Allowance for credit losses 136 126 146 128 138
Accounts receivable, gross 11,007 11,342 12,729 12,669 10,888
Financial Ratio
Allowance as a percentage of accounts receivable, gross1 1.24% 1.11% 1.15% 1.01% 1.27%

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 accounts receivable, gross = 100 × Allowance for credit losses ÷ Accounts receivable, gross
= 100 × 136 ÷ 11,007 = 1.24%

Financial ratio Description The company
Allowance as a percentage of accounts receivable, gross Allowance for doubtful accounts divided by the gross accounts receivable. United Parcel Service Inc. allowance as a percentage of accounts receivable, gross decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.