Switch to:
Acuity Brands Inc (NYSE:AYI)
Accounts Receivable
\$459 Mil (As of Feb. 2016)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Acuity Brands Inc's accounts receivables for the quarter that ended in Feb. 2016 was \$459 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Acuity Brands Inc's Days Sales Outstanding for the quarter that ended in Feb. 2016 was 53.83.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Acuity Brands Inc's Liquidation Value for the quarter that ended in Feb. 2016 was \$-419 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.

Acuity Brands Inc's Days Sales Outstanding for the quarter that ended in Feb. 2016 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 458.8 / 777.8 * 91 = 53.83

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

Acuity Brands Inc's liquidation value for the quarter that ended in Feb. 2016 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 224.3 - 1126.4 + 0.75 * 458.8 + 0.5 * 277.5 = -419

* 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.

Acuity Brands Inc Annual Data

 Aug06 Aug07 Aug08 Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Accts Rec. 380 296 269 227 255 263 264 318 373 412

Acuity Brands Inc Quarterly Data

 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 Accts Rec. 333 309 353 373 372 356 393 412 416 459
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)