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Diamond Foods Inc  (NAS:DMND) Accounts Receivable: \$111.3 Mil (As of Oct. 2015)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Diamond Foods Inc's accounts receivables for the quarter that ended in Oct. 2015 was \$111.3 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Diamond Foods Inc's Days Sales Outstanding for the quarter that ended in Oct. 2015 was 45.16.

In Ben Graham's calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Diamond Foods Inc's Net-Net Working Capital for the quarter that ended in Oct. 2015 was \$-769.5 Mil.

Historical Data

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

Diamond Foods Inc Annual Data

 Jul06 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Jul13 Jul14 Jul15 Accounts Receivable 98.22 85.04 97.20 95.51 95.01

Diamond Foods Inc Quarterly Data

 Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Accounts Receivable 119.33 92.35 97.08 95.01 111.27

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.

Diamond Foods Inc's Days Sales Outstanding for the quarter that ended in Oct. 2015 is calculated as:

 Days Sales Outstanding = Accounts Receivable / Revenue * Days in Period = 111.267 / 224.849 * 91 = 45.16

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

Diamond Foods Inc's liquidation value for the quarter that ended in Oct. 2015 is calculated as:

 Liquidation value = Cash And Cash Equivalents - Total Liabilities + (0.75 * Accounts Receivable) + (0.5 * Total Inventories) = 6.854 - 967.047 + 0.75 * 111.267 + 0.5 * 214.472 = -769.5

* 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