Compare the market capitalization to revenue ratio

Reference no: EM1357200

In July 2005, American Airlines (AMR) had a market capitalization of $2.3 billion, debt of $14.3 billion, and cash of $3.1 billion. American Airlines had revenues of $18.9 billion. British Airways (BAB) had a market capitalization of $5.2 billion, debt of $8.0 billion, cash of $2.9 billion, and revenues of $13.6 billion.

a. Compare the market capitalization-to-revenue ratio (also called the price-to-sales ratio) for AMR and BAB.

b. Compare the enterprise value-to-revenue ratio for AMR and BAB.

c. Compare the debt/capital ratio (d/d+e) for on-book and market.

d. Which of these comparisons is more meaningful? Explain.

Reference no: EM1357200

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