ssume the data presented below are from the financial statements of JetBlue and Southwest Airlines.
|
($ millions) |
Jet Blue Airways |
Southwest Airlines |
|---|---|---|
| Total Liabilities, 2013 | $4,059 | $10,326 |
| Total Liabilities, 2012 | 5,003 | 8,815 |
| Total Assets, 2013 | 6,593 | 15,463 |
| Total Assets, 2012 | 6,549 | 14,269 |
| Revenue, 2013 | 3,779 | 12,104 |
| Net Income, 2013 | 237 | 629 |
Required
a. Compute the return on equity ratio for JetBlue and Southwest for
2013. (Round your answer to one decimal place.)
JetBlue Airways Answer%
Southwest Airlines Answer%
Which company earned the higher return for its shareholders?
AnswerSouthwest AirlinesJet Blue Airways
b. Compute the debt-to-equity ratio for each company as of December
31, 2013. (Round your answer to one decimal place.)
JetBlue Airways Answer
Southwest Airlines Answer
Which company relies more on creditor financing?
AnswerSouthwest AirlinesJet Blue Airways
c. For each firm, compute net income as a percentage of revenue in
2013. (Round your answer to one decimal place.)
JetBlue Airways Answer%
Southwest Airlines Answer%
In: Accounting
A study done at the Center for Disease at a certain university tracked 18,169 asymptomatic patients with a certain disease who started therapy at different points in the progression of the infection. It was discovered that asymptomatic patients who postponed antiretroviral treatment until their disease was more advanced faced a higher risk of dying than those who had initiated drug treatment earlier.
In: Statistics and Probability
Jennings Automotive Case Facts (Student Question Prompts are Located after Case Facts) Alex Jennings took over his family’s auto supply business in 2012, after helping his father, who founded the business, run it for about 10 years. Based in Georgia, Jennings employs about 300 people, and distributes auto supplies (replacement mufflers, bulbs, engine parts, and so on) through two divisions, one that supplies service stations and repair shops, and a second that sells retail auto supplies through five “Jennings Automotive” auto supply stores. Alex’s father, and now Alex, have always endeavored to keep Jennings organization chart as simple as possible. The company has a full-time controller, managers for each of the five stores, a manager who oversees the distribution division, and Alex Jennings executive assistant. Alex (along with his father, working part-time) handles marketing and sales. Alex’s executive assistant administers the firm’s day-to-day human resource management tasks, but the company outsources most HR activities to others, including an employment agency that does its recruiting and screening, a benefits firm that administers its 401(k) plan, and a payroll service that handles its paychecks. Jennings human resource management systems consist almost entirely of standardized HR forms purchased from an HR supplies company. These include forms such as application and performance appraisal forms, as well as an “honesty” test Jennings uses to screen the staff that works in the five stores. The company performs informal salary surveys to see what other companies in the area are paying for similar positions and use these results for awarding annual merit increases (which in fact are more accurately cost-of-living adjustments). Alex’s father took a fairly paternal approach to the business. He often walked around speaking with his employees, finding out what their problems were, and even helping them out with an occasional loan—for instance, when he discovered that one of their children was sick, or for part of a new home down payment. Alex, on the other hand, tends to be more abrupt, and does not enjoy the same warm relationship with the employees as did his father. Alex is not unfair or dictatorial. He’s just very focused on improving Jennings financial performance, and so all his decisions, including his HR-related decisions, generally come down to cutting costs. For example, his knee-jerk reaction is usually to offer fewer days off rather than more, fewer benefits rather than more, and to be less flexible when an employee needs, for instance, a few extra days off because a child is sick. It’s therefore perhaps not surprising that over the past few years Jennings sales and profits have increased markedly, but that the firm has found itself increasingly enmeshed in HR/equal employment–type issues. Indeed, Alex now finds himself spending a day or two a week addressing HR problems. For example, Michael Morton, an employee at one of the stores, came to Alex’s executive assistant and told her he was “irate” about his recent firing and was probably going to sue. Michael’s store manager stated on his last performance appraisal that Michael did the technical aspects of his job well, but that he had “serious problems interacting with his coworkers.” He was continually arguing with them and complaining to the store manager about working conditions. The store manager had told Alex that he had to fire Michael because he was making “the whole place poisonous,” and that (although he felt sorry because he’d heard rumors that Michael suffered from some mental illness) he felt he had to go. Alex approved the dismissal. Greg was another problem. Greg had worked for Jennings for 10 years, the last two as manager of one of the company’s five stores. Right after Alex Jennings took over, Greg told him he had to take a Family and Medical Leave Act medical leave to have hip surgery, and Alex approved the leave. When Greg returned from leave, Alex told him that his position had been eliminated. Alex Jennings had decided to close his store and open a new, larger store across from a shopping center about a mile away and had appointed a new manager in Greg’s absence. However, the company did give Greg a (nonmanagerial) position in the new store as a counter salesperson, at the same salary and with the same benefits as he had before. Even so, “This job is not similar to my old one,” Greg insisted. “It doesn’t have nearly as much prestige.” His contention is that the FMLA requires that the company bring him back in the same or equivalent position, and that this means a supervisory position - similar to what he had before he went on leave. Alex said no, and they seem to be heading toward litigation. In another sign of the times at Jennings, the company’s controller, Anne, who had been with the company for about six years, went on pregnancy leave for 12 weeks in 2012 (also under the FMLA), and then received an additional three weeks’ leave under Jennings extended illness days program. Four weeks after she came back, she asked Alex Jennings if she could arrange to work fewer hours per week and spend about a day per week working out of her home. He refused, and about two months later fired her. Alex Jennings said, “I’m sorry, it’s not anything to do with your pregnancy-related requests, but we’ve got ample reasons to discharge you—your monthly budgets have been several days late, and we’ve got proof you may have forged documents.” She replied, “I don’t care what you say your reasons are; you’re really firing me because of my pregnancy, and that’s illegal.” Alex felt he was on safe ground as far as defending the company for these actions, although he didn’t look forward to spending the time and money that he knew it would take to fight each. However, what he learned over lunch from a colleague undermined his confidence about another case that Alex had been sure would be a “slam dunk” for his company. Alex was explaining to his friend that one of Jennings truck maintenance service people had applied for a job driving one of Jennings distribution department trucks, and Alex had turned him down because the worker was deaf. Alex (whose wife has occasionally said of him, “No one has ever accused Alex of being politically correct”) was mentioning to his friend the apparent absurdity of a deaf person asking to be a truck delivery person. His friend, who happens to work for UPS, pointed out that the U.S. Court of Appeals for the Ninth Circuit had recently decided that UPS had violated the Americans with Disabilities Act by refusing to consider deaf workers for jobs driving the company’s smaller vehicles. Although Alex’s father is semiretired, the sudden uptick in the frequency of such EEO-type issues troubled him, particularly after so many years of labor peace. However, he’s not sure what to do about it. Having handed over the reins of the company to his son, he was loath to inject himself back into the company’s operational decision making. On the other hand, he was afraid that in the short run these issues were going to drain a great deal of Alex’s time and resources, and that in the long run they might be a sign of things to come, with problems like these eventually overwhelming Jennings Automotive. He comes to you, who he knows consults in human resource management, and asks you the following questions.
Question 3:
Do you think that the employee whom Alex fired for creating what
the manager called a poisonous relationship has a legitimate claim
against us, and if so, why and what should we do about it?
Question 4:
Is it true that we really had to put Greg back into an equivalent
position, or was it adequate to just bring him back into a job at
the same salary, bonuses, and benefits as he had before his
leave?
In: Operations Management
The following regression model was estimated by an Australian-based MNC to determine its degree of economic exposure to the U.S. dollar (US$) and the South African Rand (SAR):
where the dependent variable is the percentage change in cash flows
(PCF) measured in the company's home currency over period t. The
explanatory variable (et) is the percentage change in the exchange
rate of the foreign currency (e.g., A$/SAR) over period t. The
regression was estimated over a single period for each of the two
currencies, with the following results:
| Regression Coefficient (a1) | |
| US$ | 0.10 |
| SAR | -0.76 |
Based on these results, which of the following statements is not true?
| A. |
The MNC was more sensitive to movements in the SAR than in the US$. |
|
| B. |
On average, when the US$ appreciated, the MNC’s cashflows increased. |
|
| C. |
The MNC likely imports more goods from South Africa than it exports. |
|
| D. |
On average, when the SAR depreciated, the MNC’s cashflows decreased. |
|
| E. |
All of the above are true. |
In: Accounting
1) Suppose the domestic supply (QS U.S.) and demand (QDU.S) for bicycles in the United States is represented by the following set of equations:
QS U.S. = 2P
QDU.S. = 200 – 2P.
Demand (QD) and supply (QS) in the rest of the world is represented by the equations:
QS = P
QD =160 – P. Quantities are measured in thousands and price, in U.S. dollars. After the opening of free trade with the United States, if the world price of the bicycles settles at $60, answer the following questions:
a. What are the equilibrium price and quantity for US and ROW if there is no international trade? Draw the demand and supply curves on the graph, and label these points.
b. What are the quantities of the import and export if they can trade freely with the price of $60?
c. What is the effect of the shift from no trade to free trade on US consumer surplus? On producer surplus? What is the net national gain or loss for US?
d. Calculate the net benefit for US and ROW after trade to support your answers.
In: Economics
Joeseph Gallo, the founder of the famous wine company that bears his name, said that when he first started selling wine right after Prohibition (laws outlawing the sale of alcohol), he poured two glasses of wine from the same bottle and put a price of 10 cents a bottle on one and 5 cents a bottle on the other. He let people test both and asked them which they wanted. Most wanted the 10-cent bottle, even though they were the same wine.
In: Economics
Joseph Gallo, the founder of the famous wine company that bears his name, said that when he first started selling wine right after Prohibition (laws outlawing the sale of alcohol), he poured two glasses of wine from the same bottle and put a price of 10 cents a bottle on one and 5 cents a bottle on the other. He let people test both and asked them what they wanted. Most wanted the 10-cent bottle, even though they were the same wine.
In: Economics
Joseph Gallo, the founder of the famous wine company that bears his name, said that when he first started selling wine right after Prohibition (laws outlawing the sale of alcohol), he poured two glasses of wine from the same bottle and put a price of 10 cents a bottle on one and 5 cents a bottle on the other. He let people test both and asked them which they wanted. Most wanted the 10-cent bottle, even though they were the same wine.
In: Operations Management
Which of the following is a consequence of a country running fiscal deficits? Lower balance of trade Higher trade deficits Higher national debt Less innovation
| Lower balance of trade |
| Higher trade deficits |
| Higher national debt |
|
Less innovation when we talk about the Rust Belt that stretches across parts of the Midwest and Northeast in the US, the description comes from the fact that cities and towns tend to have problems with:
|
In: Economics
ANALYZE/INTERPRET THE STUDY AS WELL AS YOUR CONCLUSIONS FROM YOUR CALCULATIONS
DVR’s allow us to skip commercials when watching TV. Some also allow advertisers to see which ads are actually watched. Advertising research indicates that an ad has to be viewed by more than 5% of households to be cost effective (at the very least break even) in the long run. A sample of 250 homes in Cincinnati were monitored to determine viewers’ reactions to a fast food commercial that featured a well-known band. The data revealed 20 of the homes actually viewed the ad
On the basis of this study, will the ad be cost effective for the company? Use the 0.01 significance level.
In: Statistics and Probability