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

Instructions
(a) 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 foranalysis.

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SOUTHWEST AIRLINES CO. Balance Sheet (partial) December 31 in millions) 2014 2,893 11,415 $14,308 2013 4,443 12,329 $16,772 Total current assets Noncurrent assets Total assets 2,806 6,549 9,355 4,953 $14,308 4,836 4,995 9,831 6,941 $16,772 Current liabilities Long-term liabilities Total liabilities Shareholders' equity Total liabilities and shareholders' equity Other information: 2014 2013 Net income (loss) Income tax expense Interest expense Cash provided by operations Capital expenditures Cash dividends $ 178 100 130 (1,521) 923 13 645 413 119 2,845 1,331 14