Purchase Solution

Delta Airlines and Southwest Airlines - company analysis

Not what you're looking for?

Ask Custom Question

(a) Select two competing companies (publicly traded) to analyze for the most recent year financial data is available.
(b) Compute the following liquidity ratios for each of the companies, and comment on the relative liquidity of the two competitors.
i) Current ratio.
ii) Receivables turnover.
iii) Average collection period.
iv) Inventory turnover.
v) Days in inventory.
vi) Current cash debt coverage.
(c) Compute the following solvency ratio for each of the companies, and comment on the relative solvency of the two competitors.
i) Debt to total assists ratio.
ii) Times interest earned.
iii) Cash debt coverage ratio.
iv) Free cash flow.
(d) Compute the following profitability ratios for each of the companies, and comment on the relative profitability of the two competitors.
i) Profit margin.
ii) Asset turnover.
iii) Return on assets.
iv) Return on common stockholders' equity.
(e) Which of the two companies would you prefer to invest in? Why, and under what circumstances? Explain.

Attachments
Purchase this Solution
Solution Summary

The two companies that have been selected for the analysis are Delta Air Lines and Southwest Airlines.

Answer includes : Liquidity Ratio, Solvency Ratio, Profitability Ratio along with the description and overall performance and comparison of both the companies and price chart comparison.

Detailed analysis attached

Solution Preview

The two companies that have been selected for the analysis are Delta Air Lines ...

Solution provided by:
Sonia Agarwal, CA
Education
  • Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
  • Bachelor of Commerce, West Bengal University
Recent Feedback
  • "I got this feedback and I wanted to know if you can explain it to me. I noticed something within your workings which I believe is incorrect.  It looks like you've mistaken the Debt ratio for the Equity Multiplier.  You've done a calculation to determine Return on Equity (ROE) but if you take a look at the ratios provided for us you'll see ROE listed on the bottom line already.  You can use ROE, Profit Margin and Total Asset Turnover to figure out the Equity Multiplier amount.  Equity multiplier is not provided for us and we need to calculate it.  I really hope this is helpful to you.  "
  • "Very attentive to detail. Answers are designed in easy to understand format."
  • "Fast response and thorough answer"
  • "thank you very much! "
  • "thank you so much !!!!!!!"
Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Basics of corporate finance

These questions will test you on your knowledge of finance.

View More Free Quizzes
Related BrainMass Solutions

  • Competitor Analysis of Southwest Airlines

    627417 Competitor Analysis of Southwest Airlines Please submit a brief description of the main competitors of Southwest Airlines.

  • Competitive Analysis: Delta and Southwest Airlines

    656056 Competitive Analysis: Delta and Southwest Airlines How can Delta and Southwest Airlines create value and generate opportunity in an pandemic environment such as the COVID pandemic?

  • Southwest Airlines Case Study

    633656 Southwest Airlines Case Study 1. What is the Southwest business model and why is it so effective? 2. Compile a comparative analysis of two competing airlines to Southwest with respect to service and price. 3.

  • Consolidation of Airlines

    Consolidation played an integral role in helping airlines such as Delta and Northwest in 2008, United and Continental in 2010, Southwest and Air Tran in 2011; and American and US Airways in 2013 (Trefis Team, 2014).

  • Southwest Airlines and Ford Motor Corporation: SWOT Analysis

    Thus, Southwest has achieved huge success but it has faced threats from Delta Airlines and American airlines. The Company has to focus on its strategy and customer satisfaction.

  • Southwest Airline Corporate Culture and Management

    Company Background Southwest Airlines after the Texas Aeronautical Commission approved their plans to fly between three cities. went into business on February 20, 1968. (Southwest, 2008). Southwest Airlines was formerly known as Air Southwest Co.

  • Southwest Airlines Acquisition Strategy for AirTran

    With Air Tran's acquisition, Southwest has got entry into US's busiest airport, Atlanta. In this way Southwest would directly face competition by Delta Airlines which has hub in Atlanta.

  • Marketing in Southwest Airlines

    In case of Southwest Airlines also, economic factors are important, because it is a low cost airline of America. Economic factors of Southwest Airlines include the economic growth of the company.

  • Benchmarking information for Classic Airlines

    Looks at some aspects of Delta (long-term customers), Southwest (CRM), and American (goal alignment) airlines and how they can help Classic Airlines improve operations.

View More Related Solutions