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National Grid PLC  (NYSE:NGG) Accounts Receivable: \$1,964 Mil (As of Mar. 2017)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. National Grid PLC's accounts receivables for the quarter that ended in Mar. 2017 was \$1,964 Mil.

Accounts receivable can be measured by Days Sales Outstanding. National Grid PLC's Days Sales Outstanding for the quarter that ended in Mar. 2017 was 37.07.

In Ben Graham's calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. National Grid PLC's Net-Net Working Capital for the quarter that ended in Mar. 2017 was \$-42,282 Mil.

Historical Data

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

National Grid PLC Annual Data

 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 Accounts Receivable 1,998.49 2,661.13 2,343.80 1,817.66 1,964.20

National Grid PLC Semi-Annual Data

 Sep07 Mar08 Sep08 Mar09 Sep09 Mar10 Sep10 Mar11 Sep11 Mar12 Sep12 Mar13 Sep13 Mar14 Sep14 Mar15 Sep15 Mar16 Sep16 Mar17 Accounts Receivable 2,343.80 3,288.34 1,817.66 3,073.59 1,964.20

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.

National Grid PLC's Days Sales Outstanding for the quarter that ended in Mar. 2017 is calculated as:

 Days Sales Outstanding = Accounts Receivable / Revenue * Days in Period = 1964.19753086 / 9669.13580247 * 91 = 37.07

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

National Grid PLC's liquidation value for the quarter that ended in Mar. 2017 is calculated as:

 Liquidation value = Cash And Cash Equivalents - Total Liabilities + (0.75 * Accounts Receivable) + (0.5 * Total Inventories) = 12197.5308642 - 56138.2716049 + 0.75 * 1964.19753086 + 0.5 * 370.37037037 = -42,282

* 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