Reference no: EM133067598
The purpose of this assignment is to evaluate the financial condition and performance of Southwest Airlines. Please open the attached excel file with the original analysis done for Southwest Airlines as reference to do this second part.
Refer to Tables A-1 through A-5 in Appendix II of the text for the operational definitions of and formulas for numerous common financial ratios, including profitability, liquidity, leverage, activity, and shareholders' return. Using these formulas, complete at least one ratio from each of the five categories, though you may apply as many of the ratios for which you can find the required information in the firm's financial reports. On your calculations page, specify for which formulas you are solving.
Determine which of the ratios provide the most key insights into the firm's current level of performance. How can you assess whether the results of your calculations are positive or negative? Explain which of the ratios give you reason to be concerned with the organization's current strategy and why.
The Organizational and Operational Plans assignment references the possible benefits and risks of forming a strategic alliance. What would be the risks of forming a strategic alliance in terms of the firm's profitability ratios? Which of those five ratios is most likely to reveal immediate information for analysis of the alliance's effectiveness?
Considering today's financial climate, how likely is it that the organization could acquire the capital necessary to support an aggressive value-enhancement strategy? From where would that capital originate? Compared to current interest rates, what do you believe is a realistic interest rate the firm might incur? Which of the liquidity ratios will be impacted by the influx of capital, if borrowed?
You will be required to incorporate instructor feedback from this paper into the Assessing and Managing Risk assignment in Topic 7.
Benchmark Information
This benchmark assignment assesses the following programmatic competencies:
BS Business Analytics; BS Business Management; BS Finance
Apply strategies for analyzing and synthesizing data and evaluating risk in making business decisions.
BS Business for Secondary Education
Demonstrate skills for the effective communication of business information and concepts.