Griffin and Lasky, Inc. (G&L) supplies industrial automation equipment and machine tools to the automotive industry. G&L
Question:
Griffin and Lasky, Inc. (G&L) supplies industrial automation equipment and machine tools to the automotive industry. G&L uses the percentage of completion method for recognizing revenue on its long-term contracts. Customer orders have long lead times because they involve multiyear capital investment programs. Sometimes orders are canceled. Selected items from the company's financial statements follow.
Required:
1. Compute earnings before interest, taxes, depreciation, and amortization (EBITDA) and adjusted EBITDA-after excluding the plant write-down-for each year in the schedule.
2. Are profits at G&L keeping pace with sales?
3. Compute the days receivables outstanding using year-end receivables for each year in the schedule.
4. Why might analysts be concerned about earnings quality at G&L?
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer