Southwest Airlines Financial Analysis
Operations Southwest Airlines operates as a major passenger airline that provides scheduled air transportation in the United States and near international markets (southwest.com). In addition, at December 31, 2016, South West functioned with a total of 723 Boeing, 737 aircraft and 101 destination in 40 states, the Commonwealth of Puerto Rico, and eight near International countries such as Mexico, Jamaica, The Bahamas, Aruba, The Dominican Republic, Costa Rica, and Cuba (Nasdaq.com). Southwest was originally established as a “point to point” airline company. Southwest grew from serving domestic aircraft from its inception, to serving international aircraft as 2017. Since international aircraft has been very successful, South West airline
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Southwest has to increase its working capital to eliminate any liquidity issues. Quik Ratio: is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet its short term obligations with its most liquid assets.
Qick ratio formula = current assets – Inventories / current liabilities
Analysis: According to table # 1, Quick radio for the last 4 quarters of Southwest airline is under 1. This low quick ratio is an indicator of Southwest is over levaaged, strungling to maintain or grow sales and collecting receivables too …show more content…
For instance, a debt ratio of .5 is often considered to be less riky. This mean that the company has twicw as many assets as liabilities.
Analysis: According to Tabel # 1, Soutwest Debt-ratio is under 1. This mean that Southwest has twice as many assets as liabilities. Acoording to the quick ratio analisys Southwest is a stable company.
Debt to equity ratio is a long term solvency ratio indicates the soundeness of long term financial policies of a company. It shows the relation between the portion of assets financed creditors and the portion of assets financed by stockholders ( www.accontingformanagement.org).
Analysis: According to table # 1 Soutwest Debt- ratio for the last 4 quarters is under 1. This mean that Southwest has a high protectction for its money. For instance, an equity ratio under one is considered sastifactory for most of the
Southwest has to increase its working capital to eliminate any liquidity issues. Quik Ratio: is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet its short term obligations with its most liquid assets.
Qick ratio formula = current assets – Inventories / current liabilities
Analysis: According to table # 1, Quick radio for the last 4 quarters of Southwest airline is under 1. This low quick ratio is an indicator of Southwest is over levaaged, strungling to maintain or grow sales and collecting receivables too …show more content…
For instance, a debt ratio of .5 is often considered to be less riky. This mean that the company has twicw as many assets as liabilities.
Analysis: According to Tabel # 1, Soutwest Debt-ratio is under 1. This mean that Southwest has twice as many assets as liabilities. Acoording to the quick ratio analisys Southwest is a stable company.
Debt to equity ratio is a long term solvency ratio indicates the soundeness of long term financial policies of a company. It shows the relation between the portion of assets financed creditors and the portion of assets financed by stockholders ( www.accontingformanagement.org).
Analysis: According to table # 1 Soutwest Debt- ratio for the last 4 quarters is under 1. This mean that Southwest has a high protectction for its money. For instance, an equity ratio under one is considered sastifactory for most of the