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Boise Inc (NYSE:BZ)
Accounts Receivable
\$254 Mil (As of Jun. 2013)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Boise Inc's accounts receivables for the quarter that ended in Jun. 2013 was \$254 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Boise Inc's Days Sales Outstanding for the quarter that ended in Jun. 2013 was 37.33.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Boise Inc's Liquidation Value for the quarter that ended in Jun. 2013 was \$-1,063 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.

Boise Inc's Days Sales Outstanding for the quarter that ended in Jun. 2013 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 254.348 / 621.664 * 91 = 37.33

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

Boise Inc's liquidation value for the quarter that ended in Jun. 2013 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 61.086 - 1459.336 + 0.75 * 254.348 + 0.5 * 288.707 = -1,063

* 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.

Boise Inc Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Accts Rec. 0 0 0 0 0 220 185 189 229 240

Boise Inc Quarterly Data

 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Accts Rec. 224 229 236 229 243 240 260 240 247 254
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