Select one of the following companies:
Southwest AirlinesDelta AirlinesUnited AirlinesAirTranContinental Airlines
Go to http://money.com or http://finance.yahoo.com and enter the company symbol and then find the financial statements. For your company, analyze the liability section of the balance sheet. For each liability, write a short description. Use information from the notes to help you. Then, calculate the debt-to-equity ratio for the current year with the available information. What tentative conclusions can you draw about the debt position of your airline? Do owners or creditors have more claims on the company’s assets? How can you tell? What types of financial risks apply to your company?
When the stock market is going up over a long period of time, investors can become complacent about the risks of being a stockholder. After the significant decline of the stock market in 2008, people have begun to rethink the risk involved in owning stock. What kinds of risks do the owners of publicly-traded companies face? What could you do, as an investor, to continue to invest in the market but minimize your risk? Select two companies that you would invest in if you had the money. Find their financial statements on the Internet and examine the shareholders’ equity section of their balance sheets. What does your analysis tell you about each firm? Is this a good investment? Explain your findings and conclusion.