Compare the financial performance of CVS and Southwest Airlines Co. on the basis of liquidity and profitability
Question:
Compare the financial performance of CVS and Southwest Airlines Co. on the basis of liquidity and profitability for 2008 and 2007. Use the following ratios: working capita, current ratio, debt to equity ratio, profit margin, asset turnover, return on assets, and return on equity. In 2006, total assets and total stockholders’ equity for CVS were $20,574.1 million and $9,917.6 million, respectively. Southwest’s total assets were $13,460 million, and total stockholders’ equity was $6,449 million in 2006. Comment on the relative performance of the two companies. In general, how does Southwest’s performance compare to CVS’s with respect to liquidity and profitability? What distinguishes southwest’s profitability performance from that of CVS?
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