Assignment:
My Company is Southwest Airlines
Competitor is-United Airlines
The following are the questions you should answer. You can find 2015 & 2016 Balance Sheet and Income Statement at finance.yahoo.com.
(Financial Ratio Analysis) Select the benchmark for peer group analysis. You'll use two kinds of benchmarks in this assignment. One is your competitor's ratios and the other is industry averages (you can find industry averages from finance.yahoo.com or www.reuters.com or investing.money.msn.com). Make sure that you cite the source of industry averages. (25 points)
1) Using the 2016 ratios from Question 2, compare your company's ratios to both competitor's and industry averages. Then describe how good or bad ratios of your company are considered.
2) Using 2015 & 2016 ratios for your company, compare your company's 2015 ratios with 2016 ratios and describe the similarities and differences.
4. (DuPont Identity)
1) Using the DuPont Identity equation, compare your company's 2016 ROE with competitor's 2016 ROE. Find out what makes difference in ROEs between your company and competitor.
2) Using the DuPont Identity equation, compare your company's 2015 ROE with 2016 ROE. Find out what makes difference in ROE between two periods if there is any difference.