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MWI Veterinary Supply Inc (NAS:MWIV)
Accounts Receivable
\$359 Mil (As of Sep. 2014)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. MWI Veterinary Supply Inc's accounts receivables for the quarter that ended in Sep. 2014 was \$359 Mil.

Accounts receivable can be measured by Days Sales Outstanding. MWI Veterinary Supply Inc's Days Sales Outstanding for the quarter that ended in Sep. 2014 was 41.23.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. MWI Veterinary Supply Inc's Liquidation Value for the quarter that ended in Sep. 2014 was \$-53 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.

MWI Veterinary Supply Inc's Days Sales Outstanding for the quarter that ended in Sep. 2014 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 358.757 / 794.059 * 91 = 41.23

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

MWI Veterinary Supply Inc's liquidation value for the quarter that ended in Sep. 2014 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 2.433 - 539.545 + 0.75 * 358.757 + 0.5 * 430.499 = -53

* 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.

MWI Veterinary Supply Inc Annual Data

 Sep05 Sep06 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Accts Rec. 77 100 112 129 142 189 200 268 283 359

MWI Veterinary Supply Inc Quarterly Data

 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Accts Rec. 270 268 293 304 310 283 316 387 343 359
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