Discuss why analysts generally do not rely on traditional financial statement ratio analysis (current ratio, EBIT/Interest, Debt/EBITDA) when analyzing E&P companies.

Use the information below from the footnotes to XYZs 10-K statement to calculate the company's production to reserves ratio for 2020.

Developed and Undeveloped Proved Reserves (MBOE)

End of 2019 89,500

Revisions 5,000

Improved Recovery 1,500

Purchases 1,000

Extensions and Discoveries 12,000

Production (11,500)

End of 2020 97,500

Costs incurred in property acquisition, exploration and development activities during 2020 (in 000s)

Property acquisition costs:

Evaluated $10,000

Unevaluated 2,000

Exploration costs 50,500

Development costs 256,175

Total costs incurred $316,875