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KKR Financial Holdings LLC (NYSE:KFN)
Accounts Receivable
\$33.6 Mil (As of Dec. 2013)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. KKR Financial Holdings LLC's accounts receivables for the quarter that ended in Dec. 2013 was \$33.6 Mil.

Accounts receivable can be measured by Days Sales Outstanding. KKR Financial Holdings LLC's Days Sales Outstanding for the quarter that ended in Dec. 2013 was 29.58.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. KKR Financial Holdings LLC's Liquidation Value for the quarter that ended in Dec. 2013 was \$-6,007.1 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.

KKR Financial Holdings LLC's Days Sales Outstanding for the quarter that ended in Dec. 2013 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 33.57 / 103.573 * 91 = 29.58

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

KKR Financial Holdings LLC's liquidation value for the quarter that ended in Dec. 2013 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 157.167 - 6189.464 + 0.75 * 33.57 + 0.5 * 0 = -6,007.1

* 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.

KKR Financial Holdings LLC Annual Data

 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Accts Rec. 2.7 67.1 88.6 147.6 116.8 98.3 57.4 62.1 47.0 33.6

KKR Financial Holdings LLC Quarterly Data

 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Accts Rec. 62.1 38.3 38.2 32.7 47.0 39.0 27.8 38.6 33.6 33.0
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