Problem Set 1 – Financial Statements and Ratios
Directions: Go to the investor relations page of Spirit Airlines to get its
latest annual report.
- Using the firm’s selected financial data:
a. Make a table showing the income statement (in M$). Note that any expenses that
do not have their own specific line listed should be grouped under “All other
expenses”
b. Use the table created to create a common size income statement (as a % of
operating revenues for that year)
c. Show year-on-year (YoY) growth
d. What happened to the profit margins?
e. What are the actual tax rates? - Using the operating stats, what is the YoY growth rate for:
a. Yield per passenger mile?
b. Operating expense per available seat mile (CASM)?
c. Revenue passenger miles?
d. Average fuel cost per gallon?
e. Considering the above, what factors do you think are affecting margins themost?
Be specific. - Using the firm’s balance sheets, show:
a. Balance sheets as shown (in M$); show only the net property and equipment
lines.
b. Common size balance sheets.
c. Are there any outliers in the balance sheets that you think merit mentioning?
d. For these years, what is the net working capital position? Current ratio? Quick
ratio? Total debt ratio? Return on assets (ROA)? Return on equity (ROE)?What
is the latest p/e ratio? - Using the Statement of Cash Flows, which operating activity items stand out to you and
why?
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Page 2 of 2 - Go to the carrier snapshot section in the Bureau of Transportation
Statistics (United States Department of Transportation).
Select American and answer the following questions:
a. What are the top three markets by share?
b. What happened to passenger yields?
c. What happened to costs per ASM?
d. What do you think this means for the bottom line?
e. What are the top three city pairs
