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Toll Brothers Inc (NYSE:TOL)
Accounts Receivable
$253 Mil (As of Jul. 2014)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Toll Brothers Inc's accounts receivables for the quarter that ended in Jul. 2014 was $253 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Toll Brothers Inc's Days Sales Outstanding for the quarter that ended in Jul. 2014 was 21.74.

In Ben Graham’s calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Toll Brothers Inc's Liquidation Value for the quarter that ended in Jul. 2014 was $-658 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.

Toll Brothers Inc's Days Sales Outstanding for the quarter that ended in Jul. 2014 is calculated as:

Days Sales Outstanding
=Account Receivable/Revenue*Days in Period
=252.516/1056.857*91
=21.74

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

Toll Brothers Inc's liquidation value for the quarter that ended in Jul. 2014 is calculated as:

Liquidation value
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=386.655-4531.341+0.75 * 252.516+0.5 * 6593.804
=-658

* 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.

Toll Brothers Inc Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
Accts Rec. 246285461276163961421691480

Toll Brothers Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Accts Rec. 511331481532322480069253
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