Question
In January2016,United Airlines (UAL) had a market capitalization of $20.56 billion, debt of $11.81 billion, and cash of $5.09 billion. United Airlines had revenues of
In January2016,United Airlines (UAL) had a market capitalization of $20.56 billion, debt of $11.81 billion, and cash of $5.09 billion. United Airlines had revenues of $39.91 billion. Southwest Airlines (LUV) had a market capitalization of $27.35 billion, debt of $3.12billion, cash of $3.03 billion, and revenues of $19.69 billion. a. Compare the market capitalization-to-revenue ratio (also called the price-to-sales ratio) for United Airlines and Southwest Airlines. b. Compare the enterprise value-to-revenue ratio for United Airlines and Southwest Airlines. c. Which of these comparisons is more meaningful? Explain.
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