Stock Analysis on Net

Verizon Communications Inc. (NYSE:VZ)

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, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Allowance for credit losses 1,017 826 896 1,252 733
Accounts receivable, gross 26,102 25,332 24,742 25,169 26,162
Financial Ratio
Allowance as a percentage of accounts receivable, gross1 3.90% 3.26% 3.62% 4.97% 2.80%

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 credit losses ÷ Accounts receivable, gross
= 100 × 1,017 ÷ 26,102 = 3.90%

Financial ratio Description The company
Allowance as a percentage of accounts receivable, gross Allowance for doubtful accounts divided by the gross accounts receivable. Verizon Communications Inc. allowance as a percentage of accounts receivable, gross decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.