more-arw search

Q&A Forum

Solving for Net Receivables

Recently took a financial modeling test as part of an interview process. The test was a three statement financial model in Excel with certain cells left blank which had to be filled in with the proper formulas.

One of them was a cell for "Net Receivables" on the balance sheet. My understanding is that Net Receivables = AR - Allowance for doubtful accounts. But the model didn't include any data on doubtful accounts so I had no idea how to determine the Net Receivables.

What am I missing? Is there some other way to back into Net Receivables with other information?

Answers

Anonymous
(Controller) |

Net Receivables = AR - Customer Credits - A/R Allowance
I don't think you missed anything

Werner Reisacher
Title: CEO
Company: Interlink Consulting LLC
(CEO, Interlink Consulting LLC) |

Tests are what they are. Invented by somebody who tries to find out about both, your technical know how and your level of confidence when applying this know how. If you had any doubts, you might have tried to come up with "some guess work" rather then sticking to the truth. And yes, if a company has not set up Allowances for bad debts as a short term liability, this balance is the net amount for reporting purposes.

3640 views

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.