Computing and Interpreting Key Ratios

Assume the data presented below are from the financial statements of JetBlue and Southwest Airlines.

$($$ millions$)$ Jet Blue

Airways Southwest

Airlines

Total Liabilities, $2013$ $$4,939$ $$9,226$

Total Liabilities, $20125,0038,815$

Total Assets, $20136,59315,463$

Total Assets, $20126,54914,269$

Revenue, $20133,77912,104$

Net Income, $201397459$

Required a$.$ Compute the return on equity ratio for JetBlue and Southwest for $2013.($Round your answer to one decimal place.$)$

JetBlue Airways Answer

$\%$

Southwest Airlines Answer

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Which company earned the higher return for its shareholders?

Answer

b$.$ Compute the debt$-$to$-$equity ratio for each company as of December $31,2013.($Round your answer to one decimal place.$)$

JetBlue Airways Answer

Southwest Airlines Answer

Which company relies more on creditor financing?

Answer

c$.$ For each firm, compute net income as a percentage of revenue in $2013.($Round your answer to one decimal place.$)$

JetBlue Airways Answer

$\%$

Southwest Airlines Answer

$\%$ Computing and Interpreting Key Ratios and Formulating an Income Statement

Data from the financial statements of The Gap, Inc. and Nordstrom, Inc.

are presented below:

a$)$ Compute the return on equity ratio for The Gap and Nordstrom for $20$X$2.$

Which company earned the higher return for its shareholders?

b$)$ Compute the debt$-$to$-$equity ratio for each company in $202.$

Which company relies more on creditor financing?