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Compute the reported and adjusted debt to equity ratio

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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.

Reference no: EM133110513

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