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Microsoft Corp  (NAS:MSFT) Accounts Receivable: \$14,561 Mil (As of Sep. 2017)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Microsoft Corp's accounts receivables for the quarter that ended in Sep. 2017 was \$14,561 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Microsoft Corp's Days Sales Outstanding for the quarter that ended in Sep. 2017 was 54.15.

In Ben Graham's calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Microsoft Corp's Net-Net Working Capital for the quarter that ended in Sep. 2017 was \$-8,453 Mil.

Historical Data

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

Microsoft Corp Annual Data

 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Accounts Receivable 17,486.00 19,544.00 17,908.00 18,277.00 19,792.00

Microsoft Corp Quarterly Data

 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Accounts Receivable 11,129.00 14,343.00 12,882.00 19,792.00 14,561.00

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.

Microsoft Corp's Days Sales Outstanding for the quarter that ended in Sep. 2017 is calculated as:

 Days Sales Outstanding = Accounts Receivable / Revenue * Days in Period = 14561 / 24538 * 91 = 54.15

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

Microsoft Corp's liquidation value for the quarter that ended in Sep. 2017 is calculated as:

 Liquidation value = Cash And Cash Equivalents - Total Liabilities + (0.75 * Accounts Receivable) + (0.5 * Total Inventories) = 138471 - 159450 + 0.75 * 14561 + 0.5 * 3211 = -8,453

* 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.

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