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Sycamore Networks Inc (OTCPK:SCMR)
Accounts Receivable
\$8.44 Mil (As of Jan. 2013)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Sycamore Networks Inc's accounts receivables for the quarter that ended in Jan. 2013 was \$8.44 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Sycamore Networks Inc's Days Sales Outstanding for the quarter that ended in Jan. 2013 was 81.33.

In Ben Grahams calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Sycamore Networks Inc's Liquidation Value for the quarter that ended in Jan. 2013 was \$58.86 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.

Sycamore Networks Inc's Days Sales Outstanding for the quarter that ended in Jan. 2013 is calculated as:

 Days Sales Outstanding = Account Receivable / Revenue * Days in Period = 8.44 / 9.47 * 91 = 81.33

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

Sycamore Networks Inc's liquidation value for the quarter that ended in Jan. 2013 is calculated as:

 Liquidation value = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 64.484 - 16.538 + 0.75 * 8.44 + 0.5 * 9.162 = 58.86

* 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.

Sycamore Networks Inc Annual Data

 Jul03 Jul04 Jul05 Jul06 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Accts Rec. 10.77 10.61 8.38 14.09 30.52 8.78 12.86 14.17 8.76 7.79

Sycamore Networks Inc Quarterly Data

 Oct10 Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Accts Rec. 6.47 10.49 6.87 8.76 9.34 12.27 6.39 7.79 5.72 8.44
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