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In mid-2012 United Airlines (UAL) had revenues of $37.4 billion, market capitalization of $6.8 billion,...

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Accounting

In mid-2012 United Airlines (UAL) had revenues of $37.4 billion, market capitalization of $6.8 billion, $12.4 billion in debt and $7.3 billion in cash. At the same time Southwest Airlines (LUV) had revenues of $17.0 billion, market capitalization of $6.6 billion, $3.3 billion in debt and $3.3 billion in cash.

  1. Compare the market capitalization to revenue ratio (the same as price to sales per share) for UAL and LUV.
  2. Compare the enterprise value to revenue ratio for UAL and LUV.
  3. Discuss which of these comparisons is more meaningful and why.

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