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Constellation Brands Inc (NYSE:STZ)
Accounts Receivable
$651 Mil (As of May. 2014)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Constellation Brands Inc's accounts receivables for the quarter that ended in May. 2014 was $651 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Constellation Brands Inc's Days Sales Outstanding for the quarter that ended in May. 2014 was 38.84.

In Ben Graham’s calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Constellation Brands Inc's Liquidation Value for the quarter that ended in May. 2014 was $-7,798 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.

Constellation Brands Inc's Days Sales Outstanding for the quarter that ended in May. 2014 is calculated as:

Days Sales Outstanding
=Account Receivable/Revenue*Days in Period
=651.3/1526*91
=38.84

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

Constellation Brands Inc's liquidation value for the quarter that ended in May. 2014 is calculated as:

Liquidation value
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=378-9555.4+0.75 * 651.3+0.5 * 1781.5
=-7,798

* 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

Days Sales Outstanding, Revenue, NCAV, Cash and Cash Equivalents, Total Liabilities, Inventory


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Constellation Brands Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Accts Rec. 850772881732525515417438472626

Constellation Brands Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Accts Rec. 438458487539472454754775626651
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