In: Finance
Please find the following ratio for Southwest Airlines
Debt ratio = total debt/total assets
Indicates what percentage of an organizations assets are financed by debt
Debt ratio = total debt / total assets
Informaion of southwest airlines (reported for last year or as on 31 dec 2020):
total debt = $ 27.7 billions
total assets = $ 36.57 billions
So,
Debt ratio of southwest airlines = 27.7 billions / 36.57 billions = 0.7574 = 75.74%
Southwest airlines has a high degree of leverage and thus financial risk.