A junior oil and gas company had the following information on its financial stat

Question

A junior oil and gas company had the following information on its financial statements for the fiscal years ending December 31. All figures are in millions of Canadian dollars.

Calculate the following for the company:

2015 2014 2013 2012 Current assets $1,624 $6,072 $3,850 $1,550 Current liabilities 629 2,181 1,276 980 Net sales 3,958 10,349 5,774 4,394 Trade accounts receivable - gross 1,474 950 749 542 Allowance for doubtful accounts

Calculate the following for the company:

(1) current ratio for 2012 through 2015 (2) receivable turnover ratio for 2013 through 2015 (3) average collection period for 2013 through 2015.
(Round ratio answers to 2 decimal places, e.g. 52.75. Round average collection period answers to 0 decimal places, e.g. 52. Use 365 days for calculation.)
2015 2014 2013 2012 Current ratio

:1

:1

:1

:1 Receivable turnover ratio

times

times

times Average collection period

days

days

days 168 34 17 14

Explanation / Answer

Current ratio = Current Assets / Current Liabilities

Receivable turnover ratio = Net sales / Average Accounts Receivable

Average collection period = 365 / Receivable Turnover ratio

Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2

2015 2014 2013 Average Accounts Receivable 1,212 [(950+1,474)/2] 849.5 [(749+950)/2] 645.5 [(542+749)/2]

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