Accounts Receivable
Money not yet collected after selling goods or services — recorded as revenue, but the cash hasn't arrived.
Accounts receivable = amounts sold on credit but not yet collected
Growing moderately in line with revenue is normal.
In plain terms
In business-to-business dealings, it's common to deliver goods first and get paid later. Accounts receivable is that "sold, but not yet collected" money.
It's already recorded in revenue (income statement), but hasn't arrived as cash (in the bank) yet. So it explains situations where "revenue rose but cash didn't come in."
What it tells you
It shows the gap between revenue and actual cash collection.
If accounts receivable grow faster than revenue, it means sales rose but that money hasn't come in yet, so the cash situation can get tight.
Formula
Accounts receivable = amounts sold on credit but not yet collected (a current asset item on the balance sheet)
What high or low means
Growing moderately in line with revenue is normal.
But if accounts receivable grow much faster than revenue, check whether sales were pushed out on credit too aggressively, and whether there is a risk the money won't be collected.
If accounts receivable rise quickly while revenue doesn't rise as much, it can be a sign that revenue was recognized early or that the risk of uncollectible amounts (bad debt) is rising (Stocklore's context reading points out the gap between "revenue and credit sales").
Credit practices differ by industry, so the trend relative to revenue means more than the absolute amount.
Metrics to read alongside
See it in real stocks
Search US stocks on Stocklore to see Accounts alongside the sector benchmark.
This explanation is for information and reference only and is not a recommendation to buy or sell any security. Investment decisions and their consequences are your own.