Problem 10 6A

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

SOUTHWEST AIRLINES CO. Balance Sheet (partial) December 31 (in millions)
		2017			2016
Total current assets		$2,830			$4,800
Noncurrent assets		10,800			12,525
Total assets		$13,630			$17,325
Current liabilities		$2,830			$4,985
Long-term liabilities		6,530			5,490
Total liabilities		9,360			10,475
Shareholders equity		4,270			6,850
Total liabilities and shareholders equity		$13,630			$17,325
Other information:
		2017			2016
Net income (loss)		$ 175			$ 560
Income tax expense		100			450
Interest expense		135			121
Cash provided by operations		(1,595	)		2,880
Capital expenditures		955			1,410
Cash dividends		20			24

Note 8. Leases: The majority of the Companys terminal operations space, as well as 82 aircraft, were under operating leases at December 31, 2017. Future minimum lease payments under noncancelable operating leases are as follows: 2018, $376,000; 2019, $324,000; 2020, $249,000; 2021, $208,000; 2022, $152,000; after 2023, $728,000. (a) Calculate each of the following ratios for 2017 and 2016.

				2017			2016
1.		Current ratio (Round answers to 2 decimal places, e.g. 6.25:1.)			:1			:1
2.		Free cash flow (Enter negative amounts using either a negative sign preceding the number -45 or parenthesis e.g. (45).)		$			$
3.		Debt to assets ratio (Round answers to 0 decimal places, e.g. 62%.)			%			%
4.		Times interest earned (Round answers to 2 decimal places, e.g. 6.25.)			times			times

Problem 10-6A Suppuse you have been preened with selected infrmetion laker from Lhe Tiniel slatemenls uf Soulhwresl Airlines Cu., sho belon Bakance Sheet (partkal) in mailions) 2017 Toltal current asets Noncurrent asscts Total assets 54,800 12,323 52,830 G4,905 ,120 52,800 0,330 ,300 4,270 Curert lidbilities Long-term abilitics Totel liabilities 6,850 13,630 $17,325 Shareholders' equity Total liabilitics and tharcholders equity Other information: 2017 Net incomc loss Tncome tax expense Intzrest expense Cash proded hy operations Capital expenditures 300 450 121 100 133 955 The majority of the como my'z terminal opcrations space, as well as B2rcraft, wcrc under oocre ng Isaacs t Doccmber 31 2017. Futura in mum cosc paymcnts under noncancolable operating lcascs re as fcllo s: 2013 S37G,C00; 2010, $32.000: 2020, s210 000; 2021 (a) calculatc oach of the followng ratios for 2017 and 2016. 2017 016 1. Current ratic (Rondanswers to 2 decimal places, e.g. 6.25:1. 2. Fraa cash flaw (Fnter nagative amounts using aither a negative sign freceding the number 45 or parenthesi..g. (45).) 3. Dabt ta ARsat, ratia (Round answers to decimal places, eg62%-) times times Timas Intarast carned (Round ansivers to 2 docinal places, o.g. 6.25.)