In a recent year, Southwest Airlines reported \(\$ 2,893,726,000\) in required pay-

Calculate debt to total assets ments on operating leases. If these assets had been purchased with debt, assets and liabilities would rise by approximately \(\$ 1,500,000,000\). Southwest's total assets in this year were \(\$ 3,256,122,000\) and total liabilities were \(\$ 1,828,804,000\).

(a) Calculate Southwest's debt to assets ratio, first using the figures reported, and then after increasing assets and liabilities for the unrecorded operating leases.

(b) Discuss the potential effect of these operating leases on your assessment of Southwest's solvency.