In January 2016, United Airlines (UAL) had a market capitalization of $20.6 billion, debt of $11.9 billion, and cash of $5.2 billion. United Airlines had revenues of $37.9 billion. Southwest Airlines (LUV) had a market capitalization of $27.5 billion, debt of $3.2 billion, cash of $3.0 billion, and revenues of $19.8 billion.

a. Compare the market capitalization-to-revenue ratio (also called the price-tosales ratio) for United Airlines and Southwest Airlines.

b. Compare the enterprise value-to-revenue ratio for United Airlines and Southwest Airlines.

c. Which of these comparisons is more meaningful? Explain.

Answer rating: 100% (QA)

1 Market amount to Revenue rate UAL 2067 379 054 Southwe... View the full answer