Question
Suppose you have been presented with selected information taken from the financial statements of Southwest Airlines Co., shown below. SOUTHWEST AIRLINES CO. Balance Sheet (partial)
Suppose you have been presented with selected information taken from the financial statements of Southwest Airlines Co., shown below.
SOUTHWEST AIRLINES CO. Balance Sheet (partial) December 31 (in millions) | |||||
---|---|---|---|---|---|
2022 | 2021 | ||||
Total current assets | $2,780 | $4,300 | |||
Noncurrent assets | 10,300 | 12,615 | |||
Total assets | $13,080 | $16,915 | |||
Current liabilities | $2,780 | $4,890 | |||
Long-term liabilities | 6,480 | 5,190 | |||
Total liabilities | 9,260 | 10,080 | |||
Shareholders equity | 3,820 | 6,835 | |||
Total liabilities and shareholders equity | $13,080 | $16,915 | |||
Other information: | |||||
2022 | 2021 | ||||
Net income (loss) | $ 150 | $ 685 | |||
Income tax expense | 100 | 400 | |||
Interest expense | 125 | 111 | |||
Cash provided by operations | (1,585 | ) | 2,720 | ||
Capital expenditures | 905 | 1,435 | |||
Cash dividends | 15 | 16 |
(a) Calculate each of the following ratios for 2022 and 2021.
2022 | 2021 | |||||||
---|---|---|---|---|---|---|---|---|
1. | Current ratio (Round answers to 2 decimal places, e.g. 6.25:1.) | enter current ratio rounded to 2 decimal places | :1 | enter current ratio rounded to 2 decimal places | :1 | |||
2. | Free cash flow (Enter negative amounts using either a negative sign preceding the number -45 or parenthesis e.g. (45).) | $enter a dollar amount | $enter a dollar amount | |||||
3. | Debt to assets ratio (Round answers to 0 decimal places, e.g. 62%.) | enter percentages rounded to 0 decimal places | % | enter percentages rounded to 0 decimal places | % | |||
4. | Times interest earned (Round answers to 2 decimal places, e.g. 6.25.) | enter times interest earned rounded to 2 decimal places | times | enter times interest earned rounded to 2 decimal places | time |
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