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Dell Inc (NAS:DELL)
Accounts Receivable
\$6,591 Mil (As of Jul. 2013)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Dell Inc's accounts receivables for the quarter that ended in Jul. 2013 was \$6,591 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Dell Inc's Days Sales Outstanding for the quarter that ended in Jul. 2013 was 41.44.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Dell Inc's Liquidation Value for the quarter that ended in Jul. 2013 was \$-17,585 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.

Dell Inc's Days Sales Outstanding for the quarter that ended in Jul. 2013 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 6591 / 14514 * 91 = 41.44

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

Dell Inc's liquidation value for the quarter that ended in Jul. 2013 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 11828 - 35090 + 0.75 * 6591 + 0.5 * 1468 = -17,585

* 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

Historical Data

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

Dell Inc Annual Data

 Jan04 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Accts Rec. 3,635 4,414 4,082 4,622 5,961 4,731 5,837 6,493 6,476 6,629

Dell Inc Quarterly Data

 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Accts Rec. 6,196 6,752 6,690 6,476 6,289 6,829 6,187 6,629 6,440 6,591
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