Suppose you have been presented with selected information taken from the financial statements of Southwest Airlines Co., shown below.

Instructions

1. Calculate each of the following ratios for 2014 and 2013.

1. Current ratio.

2. Free cash flow.

3. Debt to assets ratio.

4. Times interest earned.

B. Comment on the trend in ratios.

C. Read the company's note on leases.

If the operating leases had instead been accounted for like a purchase, assets and liabilities would increase by approximately $1,600 million. Recalculate the debt to assets ratio for 2014 in light of this information, and discuss the implications for analysis.