Receivable Contract With Nike In Kings
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FAQ
Contract AR should be entered when the revenue has been earned but not collected. This normally occurs at the time goods or services are provided and should coincide when the invoice is sent. Postponing the recording of contract AR until the payment is received is not encouraged.
The key difference between Contract asset and Account receivable is its conditionality i.e. Contract Asset is recognized in the Financial Statements when the right to receive the payment is conditional upon something other than just passage of time (having conditional right to receive payment).
Contract Receivables means, with respect to a Contract, all amounts due and payable or to become due and payable under such Contract, together with all rights to receive such amounts under such Contract.
Accounts receivable are listed under the current assets section of the balance sheet and typically fluctuate in value from month to month as the company makes new sales and collects payments from customers.
Nike's receivables turnover hit its 5-year low in May 2022 of 10.2x. Nike's receivables turnover decreased in 2022 (10.2x, -17.2%) and increased in 2020 (10.7x, +5.8%), 2021 (12.4x, +15.9%), 2023 (11.6x, +13.8%), and 2024 (12.0x, +3.1%).
Nike (NKE) Days Sales Outstanding : 37.18 (As of Nov. 2024)
Nike (NKE) Asset Turnover : 0.33 (As of Nov. 2024)
Nike's accounts payable hit its 5-year low in May 2020 of 2.248 billion. Nike's accounts payable decreased in 2020 (2.248 billion, -13.9%), 2023 (2.862 billion, -14.8%), and 2024 (2.851 billion, -0.4%) and increased in 2021 (2.836 billion, +26.2%) and 2022 (3.358 billion, +18.4%).
A good accounts receivable turnover ratio varies by industry, but in general, a higher ratio is better as it indicates efficient collections. A ratio of 7.8 is considered good on average. Monitoring and analyzing the ratio helps businesses gauge their financial health and spot areas to improve.