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Education Management Corp  (OTCPK:EDMC) Accounts Receivable: $210 Mil (As of Jun. 2014)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. Education Management Corp's accounts receivables for the quarter that ended in Jun. 2014 was $210 Mil.

Accounts receivable can be measured by Days Sales Outstanding. Education Management Corp's Days Sales Outstanding for the quarter that ended in Jun. 2014 was 38.09.

In Ben Graham's calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. Education Management Corp's Net-Net Working Capital for the quarter that ended in Jun. 2014 was $-1,734 Mil.


Historical Data

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

* Premium members only.

Education Management Corp Annual Data

Jun05 Jun06 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14
Accounts Receivable Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 167.86 157.79 203.34 206.41 210.18

Education Management Corp Quarterly Data

Sep09 Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14
Accounts Receivable Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 206.41 340.86 163.74 176.85 210.18

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.

Education Management Corp's Days Sales Outstanding for the quarter that ended in Jun. 2014 is calculated as:

Days Sales Outstanding
=Accounts Receivable/Revenue*Days in Period
=210.182/503.481*91
=38.09

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

Education Management Corp's liquidation value for the quarter that ended in Jun. 2014 is calculated as:

Liquidation value
=Cash And Cash Equivalents-Total Liabilities+(0.75 * Accounts Receivable)+(0.5 * Total Inventories)
=270.567-2161.909+0.75 * 210.182+0.5 * 0
=-1,734

* 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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