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Using the financial data provided in United Airlines’ annual
reports for 2021, 2
Using the financial data provided in United Airlines’ annual
reports for 2021, 2022, and 2023, calculate and analyze the company’s financial
performance over the three years. Briefly offer critical insights into trends,
profitability, and significant company financial health changes, including
financial ratios and firm performance.
Liquidity Ratio:
1. Current
ratio = Current assets/ current liabilities
2. Quick
ratio (or acid ratio test) = current assets – inventories/ current
liabilities
3. Cash
Ratio = Cash / current liabilities.
Financial leverage ratios:
4. Debit
ratio = total Assets – Total equity / Total Asset
OR
Debit ratio =
Total liabilities /total assets
5. Times
interest earned = EBIT /Interest expenses
6. Cash
coverage ratio = EBIT + Depreciation/ interest expenses.
Assets Management Ratio
7. Receivables
Turnover = sales/accounts receivables
8. Sales in receivables = 365/ receivable
turnover
9. Total
Asset Turnover = Sales / Total Assets
Profitability Ratios
10. Profit
margin = net income/ sales
11. Return
on asset = net income / total asset
12. Return
on equity = Net income/ total owner equity
Market Value Ratios
13. Earnings
per share = Net income / Number of outstanding shares
14. Price-earnings
ratio = Price per share/ earning per share
15. Market
to book ratio = Market value per share/book value per share
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