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Compare the market capitalization-to-revenue ratio

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Question - In early-2015, United Airlines (UAL) had a market capitalization of $25.0 billion, debt of $13.0 billion, and cash of $6.0 billion. United also had annual revenues of $40 billion. Southwest Airlines (LUV) had a market capitalization of $15 billion, debt of $3.0 billion, cash of $4.0 billion, and annual revenues of $20.00 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: EM133042543

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