Delta Air Lines Inc. Financial Statements Ratio Analysis and Environmental Analysis

Financial Statements Ratio Analysis

The Delta Air Lines Inc. data (Delta_Air_Lines_Financial_Statements.xls) has been provided to you, along with the computations of the ratios (the formulas are contained in the Excel worksheet, Ratios.) The
workbook includes worksheets for Ratios, Consolidated Balance Sheet, and Statements of Operations, Cash, and Stockholders’ Equity.
1. Review the ratios provided. (Note that there are two inventories to consider for the company: Fuel and expendable parts. The ratios provided ONLY take fuel into account.) Identify each of the following ratios that are provided in the spreadsheet for the year 2017, and provide an explanation of its meaning, comparable to other years:
 Current Ratio
 Asset Turnover
 Inventory Turnover
 Debt to Asset Ratio
 Interest Coverage
 Profit Margin
 Return on Assets
 Return on Equity
2. Based on the ratios provided, identify 2-3 questions you might have about the company’s operations that you would like more information about if you were an analyst, company manager, or investor.
3. Go to: and search for Delta Air Lines Inc. (DAL). Every company has a standard classification code for what industry they're in, such as The Standard Industrial Classification code (SIC) or North American Industry Classification System (NAICS) code. Identify the SIC code for Delta Air Lines Inc. in the information shown on the EDGAR site under the Delta Air Lines Inc. name. (Note: You can click on this code to find other companies with the same code.)
4. The other major players in the U.S. airline industry include United Continental (UAL), American Airlines (AAL), and Southwest Airlines (LUV). Choose one of these companies, and use EDGAR
 to search for the annual reports for this company from 2014-2017. (Note: In the Filing Type Box, enter “10-K” and press Enter. Then, click on the Interactive Data button for one of the years. You can view the statements by clicking on the left menu bar, or click View Excel Document to download the data. Do this for each of the years.) Conduct the ratio analysis for the company you chose and compare the ratios across years and to those of Delta Air Lines Inc. Identify any observations or questions you might have.
5. Create a visualization (graph, table, etc.) to compare the two companies on at least one factor (a ratio, fuel costs, inventory levels, revenues, expenses, etc.) Your visualization should tell a clear story about the comparative performance of the two companies. Format your visualization so it is clearly readable and attractive using some of the techniques you learned in the module. Provide a brief explanation of what the visualization is supposed to show.
Part Two: Environmental Analysis
The Board of Directors of a major airline is concerned about the possibility of an economic downturn affecting demand for air travel. Consider that you are a manager and have been tasked to do an environmental analysis for the industry and a destination analysis to determine which of the flight destinations are most popular.
1. Identify some of the questions you might have about the overall environmental industry trends (political, economic, social, technological, environmental, and legal, or others). You might include questions such as “What affects demand?” or “Who is likely to travel the most in the next five years?” “How are fuel prices determined” or “How can fuel efficiency be improved?”, for instance.
a. Identify at least one question for each of the environmental factors (political, economic, social, technological, environmental, and legal).
b. For at least one of the questions, hypothesize the answers to it, and identify where you might go to evaluate resources. For instance, if you asked a question regarding what affects demand, you might hypothesize that personal income could be a factor, and you might conclude that evaluating the overall U.S. economy or household income from data on the Bureau of Economic Analysis site could be valuable information. Identify at least one other question and at least two sources of possible information.
2. Open the Excel workbook, Departures_fy_2015_and_2016_Student.xls, and familiarize yourself with the fields in each of the worksheets