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Compare the market capitalization-to-revenue ratio

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Question - In January 2016, United Airlines (UAL) had a market capitalization of $20.53 billion, debt of $12.03 billion, and cash of $5.32 billion. United Airlines had revenues of $39.46 billion. Southwest Airlines (LUV) had a market capitalization of $27.49billion, debt of $3.07 billion, cash of $2.99 billion, and revenues of $19.77 billion.

Required -

a. Compare the market capitalization-to-revenue ratio (also called the price-to-sales 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.

Reference no: EM132629436

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