Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Analysis Please explain why the ratio moved over the last three year (numerator bigger; nominator lower; or both, etc) Explain in depth. Pick a ratio

Analysis

Please explain why the ratio moved over the last three year (numerator bigger; nominator lower; or both, etc) Explain in depth.

Pick a ratio that has a pattern from Delta Airlines and Southwest Airlines, compare both ratios and tell me why we see the changes. Include table or graph to illustrate your explanations

Southwest Airlines

Year

Year

Year

Account receivable turnover

2015

2016

2017

Sales/account receivable

44.05

35.74

0

Current ratio

Current ratio= CA/CL

0.54

0.66

0.7

Debt to equity ratio

Debt/Equity

1.9

1.76

1.41

Profit margin in %

Net income/sales

0.12

0.12

0.18

Return on Investments

(Investment revenue-Investment cost)/Investment Cost %

0.006

0.015

0.02

Delta Air Lines

Year

Year

Year

Account receivable turnover

2015

2016

2017

Sales/account receivable

20.15

19.20

17.35

Current ratio

Current ratio= CA/CL

0.52

0.49

0.42

Debt to equity ratio

Debt/Equity

3.90

3.17

2.83

Profit margin in %

Net income/sales

11.12

11.03

8.67

Return on Investments

(Investment revenue-Investment cost)/Investment Cost %

26.02

22.63

15.40

Step by Step Solution

3.42 Rating (149 Votes )

There are 3 Steps involved in it

Step: 1

To analyze the changes in the ratios over the last three years for both Delta Airlines and Southwest Airlines lets compare the selected ratios and examine the patterns The ratios we will analyze are A... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Managerial Accounting Concepts

Authors: Edmonds, Tsay, olds

6th Edition

71220720, 78110890, 9780071220729, 978-0078110894

More Books

Students also viewed these Accounting questions

Question

2.1 Is Ben Gibson acting ethically? Justify your answer from PFMA.

Answered: 1 week ago