Please find the following ratio for Southwest Airlines Debt ratio = total debt/total assets Indicates what...

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

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Expert Solution

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.

jeff jeffy answered 2 years ago

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