Selected financial data regarding current assets and current liabilities for Sou

ID: 2460091 • Letter: S

Question

Selected financial data regarding current assets and current liabilities for Southwest Airlines and Delta Airlines are provided as follows:

Calculate the current ratio for Southwest Airlines and Delta Airlines. (Enter your answers in millions, not in dollars.)

Which Airlines has the better current ratio?

Calculate the acid-test (quick) ratio for Southwest Airlines and Delta Airlines. (Enter your answers in millions, not in dollars.)

Which Airlines has the better current ratio?

Selected financial data regarding current assets and current liabilities for Southwest Airlines and Delta Airlines are provided as follows:

Current Ratio: Current Assets/ Current Liabilities=

Southwest Airlines= 6,185/8,947=0.69

Delta=9,604/10,920=0.88

Delta is better

Acid Test Ratio

= Cash + Cash Equivalents+ Short term investments+ Current receivables/Current liabilities

Southwest Airlines= 1,275+3,154/8,947=0.50

Delta=5,184+1,401/10,920=0.60

Delta is better

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