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ON Semiconductor Corp (NAS:ONNN)
Accounts Receivable
\$418 Mil (As of Dec. 2014)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. ON Semiconductor Corp's accounts receivables for the quarter that ended in Dec. 2014 was \$418 Mil.

Accounts receivable can be measured by Days Sales Outstanding. ON Semiconductor Corp's Days Sales Outstanding for the quarter that ended in Dec. 2014 was 44.08.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. ON Semiconductor Corp's Liquidation Value for the quarter that ended in Dec. 2014 was \$-1,001 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.

ON Semiconductor Corp's Days Sales Outstanding for the quarter that ended in Dec. 2014 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 417.5 / 864.2 * 91 = 44.08

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

ON Semiconductor Corp's liquidation value for the quarter that ended in Dec. 2014 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 517.8 - 2196.5 + 0.75 * 417.5 + 0.5 * 729.9 = -1,001

* 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.

ON Semiconductor Corp Annual Data

 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Accts Rec. 160 178 175 199 261 295 457 358 383 418

ON Semiconductor Corp Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Accts Rec. 415 358 367 408 419 383 417 437 489 418
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