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PSS World Medical, Inc. (NAS:PSSI)
Accounts Receivable
\$194 Mil (As of Sep. 2012)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. PSS World Medical, Inc.'s accounts receivables for the quarter that ended in Sep. 2012 was \$194 Mil.

Accounts receivable can be measured by Days Sales Outstanding. PSS World Medical, Inc.'s Days Sales Outstanding for the quarter that ended in Sep. 2012 was 84.25.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. PSS World Medical, Inc.'s Liquidation Value for the quarter that ended in Sep. 2012 was \$-454 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.

PSS World Medical, Inc.'s Days Sales Outstanding for the quarter that ended in Sep. 2012 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 194.255 / 420.798 * 91 = 84.25

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

PSS World Medical, Inc.'s liquidation value for the quarter that ended in Sep. 2012 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 122.351 - 804.369 + 0.75 * 194.255 + 0.5 * 165.629 = -454

* 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.

PSS World Medical, Inc. Annual Data

 Mar03 Mar04 Mar05 Mar06 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Accts Rec. 154 188 217 209 223 237 230 228 247 258

PSS World Medical, Inc. Semi-Annual Data

 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Accts Rec. 223 232 239 247 237 245 250 258 192 194
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