Reference no: EM133110513
Question - Royal Dutch Shell [RDS] sells certain of its accounts receivable through its wholly owned subsidiary, Royal Receivables Company, a special limited-purpose corporation. The company's net accounts receivables sold under this facility totalled $306.2, $230.0, and $206.6 million at December 31, 2021, 2020, and 2019, respectively. Selected reported financial data follow:
Years ended December 31 (in $millions)
|
2021
|
2020
|
|
Sales
|
5902
|
3604
|
|
Accounts Receivables
|
624
|
1084
|
|
Current Assets
|
1372
|
4156
|
|
Current Liabilities
|
738
|
3986
|
|
Total Debt
|
2192
|
533
|
|
Stock Holders' Equity
|
1900
|
3036
|
|
Cash flow from operations
|
116
|
(192)
|
Required -
a) Compute the impact of the sale of receivables on Royal Dutch Shell 2021:
1. Current ratio
2. Receivable turnover ratio
3. Receivable's collection days
b) Compute the reported and adjusted (for the sale of receivables) debt to equity ratio for 2021.
c) Compute the reported and adjusted (for the sale of receivables) debt to equity ratio for 2021.