Switch to:
Penn West Petroleum Ltd (NYSE:PWE)
Accounts Receivable
$254 Mil (As of Jun. 2014)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Penn West Petroleum Ltd's accounts receivables for the quarter that ended in Jun. 2014 was $254 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Penn West Petroleum Ltd's Days Sales Outstanding for the quarter that ended in Jun. 2014 was 36.06.

In Ben Graham’s calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Penn West Petroleum Ltd's Liquidation Value for the quarter that ended in Jun. 2014 was $-3,902 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.

Penn West Petroleum Ltd's Days Sales Outstanding for the quarter that ended in Jun. 2014 is calculated as:

Days Sales Outstanding
=Account Receivable/Revenue*Days in Period
=254.189944134/641.527001862*91
=36.06

2. In Ben Graham’s calculation of liquidation value, Penn West Petroleum Ltd's accounts receivable are only considered to be worth 75% of book value:

Penn West Petroleum Ltd's liquidation value for the quarter that ended in Jun. 2014 is calculated as:

Liquidation value
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=0-4092.17877095+0.75 * 254.189944134+0.5 * 0
=-3,902

* 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.

Penn West Petroleum Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Accts Rec. 131185229275315355388582367242

Penn West Petroleum Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Accts Rec. 487374453367427354339242273254
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