Manual calculation of changes in accounts receivable not matching to reported changes in Operating cash flow .

[mmishaal]

Im trying to calculate the changes in accounts receivable for a company, in 2017 AR was $ 8866 M and in 2018 is $7508 M , when i subtract 2018 from 2017 i get $ 1358 M, however in the operating cash flow the changes is reported as $ 236 M, what im missing...?

 

[kirby]

The A/R is stated as being shown “net”, meaning net of allowance for bad debt. The missing difference was caused by a change in the allowance, which is non-cash.

 

[mmishaal]

Thanks Kirby , but even after factoring Bad debit allowance , im not geeing the same number as cash flow , any idea,,?

 

[bklynboy]

It says its net of the effects of acquisitions and divestitures so on the BS you are seeing the "gross numbers" of that whereas on CF its excluded. Not sure why its done that way but looks like none of their lines will match (Other current assets doesn't work either) Did this company have a large buy or sell of a company in this years?

 

[mmishaal]

It says its net of the effects of acquisitions and divestitures so on the BS you are seeing the "gross numbers" of that whereas on CF its excluded. Not sure why its done that way but looks like none of their lines will match (Other current assets doesn't work either) Did this company have a large buy or sell of a company in this years?

IT seems like they did , im not an expert , attached the 10k , can you help...?

 

[kirby]

Decrease in A/R was over a billion. Probably due to spinoff per Note 2 of the footnotes, which was about that magnitude.

 

[VS2000]

I am trying to learn to read balance sheets, cash flow statements etc & I see similar stuff all over the place

I was trying to take some figures from the balance sheet & do my own calculations to arrive at the figures in the cash flow statement.

This is MSFT Balance Sheet - http://financials.morningstar.com/balance-sheet/bs.html?t=MSFT&region=usa&culture=en-US

In particular, I am looking at 2014 & 2015 balance sheet figures & trying to calculate the 2015 cash flow.

From Balance sheet

2014 Accounts Receivable = 19,544
2015 Accounts Receivable = 17,908

So the change in AR = 19544 - 17908 = 1636

However, in the cash flow statement - http://financials.morningstar.com/cash-flow/cf.html?t=MSFT&region=usa&culture=en-US

Here the AR change is shown as 1,456 & not 1,636.

I am looking at reinstated figures in all cases.

I cannot figure out the reason for the discrepancy.

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Next I looked the SEC filings for the same year

https://www.sec.gov/Archives/edgar/data/789019/000119312514289961/d722626d10k.htm

https://www.sec.gov/Archives/edgar/data/789019/000119312515272806/d918813d10k.htm

2014:

Accounts receivable, net of allowance for doubtful accounts of $301 and $336 - 19,544

2015:

Accounts receivable, net of allowance for doubtful accounts of $335 and $301 - 17,908

I don't think this still matches with the cash flow statement. I am unable to figure out how to start with these figures & arrive at the amount in the cash flow statement?

 

[kirby]

So there was a 180 decrease in A/R not explained by changes in cashflow. OK. Well, lots of things could cause this. (Maybe Eleven from Stranger Things sent it to the Upside Down?!)

For example: let's say that a customer with 180 in A/R owed to M/S could not pay in cash but instead gave securities worth 180 to M/S to settle the debt. That would decrease A/R by 180 and be a non-cash transaction. The point is: there must have been a 180 decrease in A/R caused by a non-cash event and there is nothing in the footnotes to detail this (probably not a material enough event for M/S).