Delta Ratio

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Analysis of Ratios
For project three, I selected two major Airline Companies—Delta Airlines, Inc. (Delta) and United Continental Holdings (United). As a pilot myself, I was excited to analyze these two companies because they represent what it means to provide exceptional service in any function to a customer. Both companies are leaders in the air transport field and operate all over the United States and world. Delta, for example, allocates 15% of its stock to its employees (Anderson 1). This is unique in the airline industry and shows its commitment to its employees. United, on the other hand, actually calculates an algorithm that they apply to each flight that places certain planes in front of others if there is a weather delay or air traffic …show more content…
To determine this, I computed two ratios: the current ratio and the debt ratio. The debt ratio is of concern because it indicates how much of a company’s assets are financed by debt. The closer this ratio is to one, the harder it is for a company to pay off their total liabilities. Whereas the current ratio compares current liabilities to current assets and shows a company’s ability to pay off those current liabilities. When looking at the debt ratio, United’s is higher than Delta at .9 and .8, respectively. However, Delta’s current ratio is lower than United’s at .68 and .72, respectively. This reveals that Delta would have a harder job bankrolling their current liabilities with their current assets. Nevertheless, the debt ratio measures the total amount of liabilities and assets and therefore gives the edge to …show more content…
The inventory turnover, as mentioned previously, measures how many times a company is able to sell its average level of inventory over a time period. Similarly, the number of days in inventory ratio shows the average number of days inventory remains with a company. In this instance, the inventory turnover ratios for United and Delta were 25.2 and 20.1, respectfully. Indicating that United was able to control their inventory levels better by selling and replacing it more over 2013 than Delta. Additionally, United was able to have a lower average number of days in inventory at 14, compared to Delta’s at 18. Thus demonstrating that United’s inventory system is
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