Switch to:
GuruFocus has detected 3 Warning Signs with Principal Financial Group Inc \$PFG.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Principal Financial Group Inc (NYSE:PFG)
Accounts Receivable
\$1,362 Mil (As of Dec. 2016)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Principal Financial Group Inc's accounts receivables for the quarter that ended in Dec. 2016 was \$1,362 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Principal Financial Group Inc's Days Sales Outstanding for the quarter that ended in Dec. 2016 was 35.37.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Principal Financial Group Inc's Liquidation Value for the quarter that ended in Dec. 2016 was \$-214,046 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.

Principal Financial Group Inc's Days Sales Outstanding for the quarter that ended in Dec. 2016 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 1361.9 / 3513.8 * 91 = 35.37

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

Principal Financial Group Inc's liquidation value for the quarter that ended in Dec. 2016 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 2719.6 - 217787 + 0.75 * 1361.9 + 0.5 * 0 = -214,046

* 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.

Principal Financial Group Inc Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Accts Rec. 951 988 1,065 1,063 1,245 1,084 1,241 1,213 1,429 1,362

Principal Financial Group Inc Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Accts Rec. 1,189 1,213 1,230 1,283 1,402 1,429 1,310 1,505 1,383 1,362
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)