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The Valspar Corp  (NYSE:VAL) Accounts Receivable: \$827 Mil (As of Apr. 2017)

Accounts Receivable are created when a customer has received a product but has not yet paid for that product. The Valspar Corp's accounts receivables for the quarter that ended in Apr. 2017 was \$827 Mil.

Accounts receivable can be measured by Days Sales Outstanding. The Valspar Corp's Days Sales Outstanding for the quarter that ended in Apr. 2017 was 68.85.

In Ben Graham's calculation of liquidation value, accounts receivable are only considered to be worth 75% of book value. The Valspar Corp's Net-Net Working Capital for the quarter that ended in Apr. 2017 was \$-2,122 Mil.

Historical Data

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

The Valspar Corp Annual Data

 Oct07 Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Oct15 Oct16 Accounts Receivable 681.10 771.40 840.45 857.26 815.43

The Valspar Corp Quarterly Data

 Jul12 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Accounts Receivable 827.90 861.59 815.43 691.73 826.83

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.

The Valspar Corp's Days Sales Outstanding for the quarter that ended in Apr. 2017 is calculated as:

 Days Sales Outstanding = Accounts Receivable / Revenue * Days in Period = 826.826 / 1095.833 * 91 = 68.85

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

The Valspar Corp's liquidation value for the quarter that ended in Apr. 2017 is calculated as:

 Liquidation value = Cash And Cash Equivalents - Total Liabilities + (0.75 * Accounts Receivable) + (0.5 * Total Inventories) = 340.878 - 3353.663 + 0.75 * 826.826 + 0.5 * 542.082 = -2,122

* 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