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GuruFocus has detected 6 Warning Signs with Marvell Technology Group Ltd \$MRVL.
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Marvell Technology Group Ltd (NAS:MRVL)
Accounts Receivable
\$335 Mil (As of Jan. 2017)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Marvell Technology Group Ltd's accounts receivables for the quarter that ended in Jan. 2017 was \$335 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Marvell Technology Group Ltd's Days Sales Outstanding for the quarter that ended in Jan. 2017 was 61.70.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Marvell Technology Group Ltd's Liquidation Value for the quarter that ended in Jan. 2017 was \$1,385 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.

Marvell Technology Group Ltd's Days Sales Outstanding for the quarter that ended in Jan. 2017 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 335.384 / 496.026 * 91 = 61.70

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

Marvell Technology Group Ltd'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) = 1668.36 - 620.999 + 0.75 * 335.384 + 0.5 * 171.969 = 1,385

* 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.

Marvell Technology Group Ltd Annual Data

 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17 Accts Rec. 332 222 357 459 407 330 453 421 323 335

Marvell Technology Group Ltd Quarterly Data

 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Accts Rec. 445 421 394 418 381 323 281 349 362 335
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