Analysis Project: Long-Term Debt-Paying Ability (accounting help)

SOUTHWEST AIRLINES CO.

CONSOLIDATED BALANCE SHEET

(In millions, except share data)

		DECEMBER 31,
		2010				2009
						(As adjusted-Note 3)
ASSETS
Current assets:
Cash and cash equivalents		$	1,261			$	1,114
Short-term investments			2,277				1,479
Accounts and other receivables			195				169
Inventories of parts and supplies, at cost			243				221
Deferred income taxes			214				291
Prepaid expenses and other current assets			89				84
Total current assets			4,279				3,358
Property and equipment, at cost:
Flight equipment			13,991				13,719
Ground property and equipment			2,122				1,922
Deposits on flight equipment purchase contracts			230				247
			16,343				15,888
Less allowance for depreciation and amortization			5,765				5,254
			10,578				10,634
Other assets			606				277
		$	15,463			$	14,269
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable		$	739			$	732
Accrued liabilities			863				729
Air traffic liability			1,198				1,044
Current maturities of long-term debt			505				190
Total current liabilities			3,305				2,695
Long-term debt less current maturities			2,875				3,325
Deferred income taxes			2,493				2,200
Deferred gains from sale and leaseback of aircraft			88				102
Other noncurrent liabilities			465				493
Commitments and contingencies
Stockholders equity:
Common stock, $1.00 par value: 2,000,000,000 shares authorized; 807,611,634 shares issued in 2010 and 2009			808				808
Capital in excess of par value			1,183				1,216
Retained earnings			5,399				4,971
Accumulated other comprehensive loss			(262	)			(578	)
Treasury stock, at cost: 60,177,362 and 64,820,703 shares in 2010 and 2009, respectively			(891	)			(963	)
Total stockholders equity			6,237				5,454
		$	15,463			$	14,269

For South west airlines balance sheet and income statement : https://www.sec.gov/Archives/edgar/data/92380/000119312511026045/d10k.htm#toc147535_29

Calculate the following:

Times interest earned

Debt ratio

Debt/equity ratio

Fixed Charge Coverage ratio

Horizontal Analysis (for evaluating ratios, trends, etc.)

Vertical Analysis (for evaluating ratios, trends, etc.

Then do the following:

Interprets and discusses results

Evaluation