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Keurig Green Mountain Inc  (NAS:GMCR) Accounts Receivable: \$581 Mil (As of Dec. 2015)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Keurig Green Mountain Inc's accounts receivables for the quarter that ended in Dec. 2015 was \$581 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Keurig Green Mountain Inc's Days Sales Outstanding for the quarter that ended in Dec. 2015 was 42.13.

In Ben Graham's calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Keurig Green Mountain Inc's Net-Net Working Capital for the quarter that ended in Dec. 2015 was \$-502 Mil.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Keurig Green Mountain Inc Annual Data

 Sep06 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Accounts Receivable 310.32 363.77 467.98 621.45 517.94

Keurig Green Mountain Inc Quarterly Data

 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Accounts Receivable 643.03 524.33 441.27 517.94 581.05

Calculation

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.

Keurig Green Mountain Inc's Days Sales Outstanding for the quarter that ended in Dec. 2015 is calculated as:

 Days Sales Outstanding = Accounts Receivable / Revenue * Days in Period = 581.054 / 1258.421 * 91 = 42.13

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

Keurig Green Mountain Inc's liquidation value for the quarter that ended in Dec. 2015 is calculated as:

 Liquidation value = Cash And Cash Equivalents - Total Liabilities + (0.75 * Accounts Receivable) + (0.5 * Total Inventories) = 214.909 - 1411.792 + 0.75 * 581.054 + 0.5 * 517.745 = -502

* 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