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 day€™s receivables outstanding using year-end receivables for each year in the schedule.
4. Why might analysts be concerned about earnings quality atG&L?

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(s in millions) Sales Accounts receivable billed 2012 2013 2014 S571.5 619.5 141.6 104.5 246.1 94.5 249.4 343.9 730.6 147.9 202.7 350.6 Accounts receivable unbilled Total accounts receivable 57.4 74.8 102.3 Earnings before interest and taxes (EBIT) Depreciation and amortization Plant write-down 75.8 15.4 74.8 38.1 19.3 30.3