Receivable Portfolio Analysis

definition

Receivable Portfolio
spreading investments in receivables over a customer base

receivables are tracked down per customer, customer

group, receivable age, and customer balance
 analysis

history matters
ceteris paribus, a pattern is followed
 classification

Ao Tzu Company
Account Group Amount Spread
Current Account 6,000,000 75%
Current Accounts
accounts not yet due for Past Due Accounts
collection
1-30 days 1,000,000 12.5%
31-60 days 500,000 6.25%
61-90 days 300,000 3.75%
91-120 days 100,000 1.25%
Past Due
Account that is still 121-180 days 50,000 0.62%
outstanding after credit period
181-360 days 30,000 0.38%
181-360 days 20,000 0.25%
Total A/R 8,000,000 100%
 Aging of A/R

tracks down A/R

serves as an analysis sheet
gives an idea of which accounts are stagnant
allows estimation of doubtful accounts
 Aging of A/R
Ao Tzu Company
Doubtful Doubtful
Account Group Amount
Account Rate Accounts
Current Account 6,000,000 1% 60,000

Past Due Accounts

1-30 days 1,000,000 3% 30,000

25,000
31-60 days 500,000 5%
24,000
61-90 days 300,000 8%
10,000
91-120 days 100,000 10%
10,000
121-180 days 50,000 20% 9,000
181-360 days 30,000 30% 7,500

181-360 days 20,000 50% 175,500