Compare leverage ratio for Delta and United Airlines

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Reference no: EM132782557

Question - In early-2019, Delta Airlines had total assets worth $24.8 billion, debt of $12.8 billion, and cash of $5.5 billion. Delta also had annual revenues of $38.9 billion. However, United Airline had total assets of $28.8 billion, debt of $2.7 billion, cash of $2.9 billion, and annual revenues of $18.6 billion.

Required -

a. Compare the leverage ratio for Delta Airlines and United Airlines.

b. The company with the higher leverage ratio will be less profitable and therefore this will have a negative impact on that company's share price. Do you agree with this statement? Give reasons.

Reference no: EM132782557

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