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GuruFocus has detected 5 Warning Signs with Qualcomm Inc $QCOM.
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Qualcomm Inc (NAS:QCOM)
Accounts Receivable
$3,532 Mil (As of Jun. 2017)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Qualcomm Inc's accounts receivables for the quarter that ended in Jun. 2017 was $3,532 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Qualcomm Inc's Days Sales Outstanding for the quarter that ended in Jun. 2017 was 60.01.

In Ben Graham’s calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Qualcomm Inc's Liquidation Value for the quarter that ended in Jun. 2017 was $-8,572 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.

Qualcomm Inc's Days Sales Outstanding for the quarter that ended in Jun. 2017 is calculated as:

Days Sales Outstanding
=Account Receivable/Revenue*Days in Period
=3532/5371*91
=60.01

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

Qualcomm Inc's liquidation value for the quarter that ended in Jun. 2017 is calculated as:

Liquidation value
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=20863-33085+0.75 * 3532+0.5 * 2002
=-8,572

* 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

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 local exchange's currency.

Qualcomm Inc Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
Accts Rec. 7154,0387007309931,4592,1422,4121,9642,219

Qualcomm Inc Quarterly Data

Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17Jun17
Accts Rec. 2,0581,9611,9641,3231,7381,9392,2192,0854,2013,532
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