Switch to:
GuruFocus has detected 5 Warning Signs with Bank of Montreal \$BMO.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Bank of Montreal (NYSE:BMO)
Accounts Receivable
\$1,008 Mil (As of Jan. 2017)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Bank of Montreal's accounts receivables for the quarter that ended in Jan. 2017 was \$1,008 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Bank of Montreal's Days Sales Outstanding for the quarter that ended in Jan. 2017 was 22.44.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Bank of Montreal's Liquidation Value for the quarter that ended in Jan. 2017 was \$-461,931 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.

Bank of Montreal's Days Sales Outstanding for the quarter that ended in Jan. 2017 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 1008.11651369 / 4099.97724342 * 91 = 22.44

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

Bank of Montreal's liquidation value for the quarter that ended in Jan. 2017 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 30317.0750209 - 493003.868619 + 0.75 * 1008.11651369 + 0.5 * 0 = -461,931

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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 local exchange's currency.

Bank of Montreal Annual Data

 Oct07 Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Oct15 Oct16 Accts Rec. 0 6,946 0 1,433 2,751 1,310 1,028 593 429 684

Bank of Montreal Quarterly Data

 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Accts Rec. 593 478 483 466 429 517 574 389 684 1,008
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)