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Category > Business & Finance Posted 03 Jun 2017 My Price 12.00

Computing and Interpreting Key Ratios

Computing and Interpreting Key Ratios

Data from the financial statements of Jetblue airways and southwest airlines are presented below.

 

($ millions)

Jet blueairways

southwestairlines

  
       

Total liabilities, December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . .

$4,939

$ 9,226

  

Total liabilities, December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . .

5,003

8,815

  

Total assets, December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,593

15,463

  

Total assets, December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,549

14,269

  

Revenue, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,779

12,104

  

Net income, 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97

459

  

Required

  1. Compute the return on equity ratio for JetBlue and southwest for 2010. Which company earned the higher return for its shareholders?

  2. Compute the debt-to-equity ratio for each company as of December 31, 2010. Which company relies more on creditor financing?

  3. For each firm, compute net income as a percentage of revenue in 2010.

  4. Based on your answers to questions a , b , and c , compare these two competitors. What might be the cause of any differences in the ratios that you computed?

Answers

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Status NEW Posted 03 Jun 2017 12:06 PM My Price 12.00

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