Switch to:
Best Buy Co Inc (NYSE:BBY)
Accounts Receivable
$1,066 Mil (As of Oct. 2014)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Best Buy Co Inc's accounts receivables for the quarter that ended in Oct. 2014 was $1,066 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Best Buy Co Inc's Days Sales Outstanding for the quarter that ended in Oct. 2014 was 10.37.

In Ben Graham’s calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Best Buy Co Inc's Liquidation Value for the quarter that ended in Oct. 2014 was $-3,802 Mil.


Definition

Accounts Receivable is money owed to a business by customers and shown on its Balance Sheet as an asset.


Explanation

1. Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Days sales outstanding measures of the average number of days that a company takes to collect revenue after a sale has been made. It is a financial ratio that illustrates how well a company's accounts receivables are being managed.

Best Buy Co Inc's Days Sales Outstanding for the quarter that ended in Oct. 2014 is calculated as:

Days Sales Outstanding
=Account Receivable/Revenue*Days in Period
=1066/9380*91
=10.37

2. In Ben Graham’s calculation of liquidation value, Best Buy Co Inc's accounts receivable are only considered to be worth 75% of book value:

Best Buy Co Inc's liquidation value for the quarter that ended in Oct. 2014 is calculated as:

Liquidation value
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=3138-11189+0.75 * 1066+0.5 * 6900
=-3,802

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Be Aware

Net receivables tells us a great deal about the different competitors in the same industry. In competitive industries, some attempt to gain advantage by offering better credit terms, causing increase in sales and receivables.

If company consistently shows lower % Net receivables to gross sales than competitors, then it usually has some kind of competitive advantage which requires further digging.

Average Days Sales Outstanding is a good indicator for measuring a company’s sales channel and customers. A company may book great revenue and earnings growth but never receive payment from their customers. This may force a write-off in the future and depress future earnings.


Related Terms

Days Sales Outstanding, Revenue, NCAV, Cash and Cash Equivalents, Total Liabilities, Inventory


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Best Buy Co Inc Annual Data

Feb04Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Jan14
Accts Rec. 3433754395485491,8682,0202,3482,2881,308

Best Buy Co Inc Quarterly Data

Apr12Jul12Oct12Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Accts Rec. 1,8462,1352,2509371,1881,1231,3088711,0051,066
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK