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You have been presented with the selected information taken from the financial statements of Southwest Airlines Co. shown on the next page.

Note 8. Leases
The majority of the Company?s terminal operations space, as well as 84 aircraft, were under operating leases at December 31, 2006. Future minimum lease payments under non-cancelable operating leases are as follows: 2007, $360,000; 2008, $318,000; 2009, $280,000; 2010, $250,000; 2011, $203,000; after 2011, $1,000,000.
Instructions
(a) Calculate each of the following ratios for 2006 and 2005.
(1) Current ratio.
(2) Free cash flow.
(3) Debt to total assets.
(4) Times interest earned ratio.
(b) Comment on the trend in ratios.
(c) Read the company?s note on leases. If the operating leases had instead been accounted for like a purchase, assets and liabilities would increase by approximately $1,500 million. Recalculate the debt to total assets ratio for 2006 in light of this information, and discuss the implictions foranalysis.