Above the given data in the figure of Southwest Airlines and American Airlines 2 years of data 2018 and 2019. Explain it and compare: What the given figure says.

1) Explain and compare both airlines data of 2018 and 2019 inventory turnover and the days in inventory.

2) Explain and compare both airlines data of 2018 and 2019 receivables turnover and the days in inventory.

3) Explain and compare both airlines data of 2018 and 2019 working capital, current ratio and quick ratio for two years (liquidity ratios).

Transcribed Image Text:

Company Southwest Airlines Sales (/) Average inventory Inventory turnover Sales American Airlines (/) Average inventory Inventory turnover Company Southwest Airlines Inventory turnover American Airlines Particulars Days in inventory Particulars Average inventory (/) cost of goods sold (*)365 Days in inventory Average inventory (/) cost of goods sold (*)365 Days in inventory Amount (2018) 21,965,000 440,500 50 44,541,000 1,440,500 31 Amount (2018) 440,500 16,445,000 0.03 10 1,440,500 35,379,000 0.04 14.6 Amount (2019) 22,428,000 495,000 45 45,768,000 1,686,500 27 Amount (2019) 495,000 15,907,000 0.03 11 1,686,500 34,490,000 0.05 17.8 Company Southwest Airlines Sales (/) Average inventory Inventory turnover Sales American Airlines (/) Average inventory Inventory turnover Company Southwest Airlines Inventory turnover American Airlines Particulars Days in inventory Particulars Average inventory (/) cost of goods sold (*)365 Days in inventory Average inventory (/) cost of goods sold (*)365 Days in inventory Amount (2018) 21,965,000 440,500 50 44,541,000 1,440,500 31 Amount (2018) 440,500 16,445,000 0.03 10 1,440,500 35,379,000 0.04 14.6 Amount (2019) 22,428,000 495,000 45 45,768,000 1,686,500 27 Amount (2019) 495,000 15,907,000 0.03 11 1,686,500 34,490,000 0.05 17.8

Answer rating: 100% (QA)

1The higher the inventory turnover the better since high inventory turnover typically means a compan... View the full answer