Southwest Financial Analysis - 2602 Words

[pic] Southwest Airlines Financial Performance Analysis Presented to Gary C. Kelly Chairman of the Board, President and CEO by Total Resource Network Raquel Alston, Tanya Spencer and, Nicole Stenhouse for BUS 515 Financial Management Professor James Kerwin October 3, 2011 Introduction Total Resource Network (TRN) congratulates Southwest Airlines for thirty-eight years of consecutive profitability. This is a major accomplishment that should be applauded especially during this economic recession and recovery period. Southwest’s success has been attributed to their core values and mission that begin with their employees and exceptional customer service. These two attributes along with low airfares have†¦show more content†¦Ã¢â‚¬Å"The short-term liquidity ratios are used in the evaluation of short-term liquidity to convert current assets into cash in order to reduce the financial obligations of the company as they become due† (Covee 2010 pg.45). These ratios are particularly significant to the creditors and potential lenders of a company because they determine the ability of that company to meet current payments of a debt. [pic] Southwest’s current ratio is 1.29% with JetBlue following closely behind with a 1.25% current ratio, as compared to industry average of .80% one can see Southwest’s ability to repay debt exceeds the industry average. The quick ratios have a difference of .17% between Southwest’s 1.13% and JetBlue’s .96%, compared to the industry average of .63% the difference is almost 50%. This equates to Southwest’s ability to pay short term obligations without relying on the sale of its inventories, which also means they are in good liquid condition. Efficiency Collection period is a key measure of accounts receivable quality. Increases in the average collection period of receivables may indicate increases in acceptance of poor credit risks or less energetic collection efforts. Inventory turnover measures how quickly inventory is sold. Decrease in inventory turnover may indicate problems such as slower-moving merchandise or a worsening coordination of buying and selling functions. Interestingly, Southwest’s average collection period is the best in theShow MoreRelatedSouthwest Financial Analysis3617 Words   |  15 PagesSOUTHWEST AIRLINES Southwest Airlines is the nation s low fare, high customer satisfaction airline. Southwest was incorporated in Texas in 1967 and commenced Customer Service on June 18, 1971, with 3 Boeing 737 aircraft serving 3 Texas cities Ââ€" Dallas, Houston, and San Antonio. At year-end 2004, Southwest operated 417 Boeing 737 aircraft and provided service to 60 airports in 59 cities in 31 states throughout the United States. Southwest Airlines topped the monthly domestic passenger trafficRead MoreSouthwest Airlines Financial Analysis4454 Words   |  18 PagesExecutive Summary The strategy of Southwest Airlines (SWA) has remained the same, which is to give customers low-cost, point-to-point airfare, with excellent customer service. This simple strategy has resulted in SWA posting profits for 30 consecutive years. While other airlines are downsizing, SWA is showing slow steady growth. This performance is evident throughout their SEC Filings. First we will look at SWAs ROI and ROE compared to the rest of the industry. Two thousand and one and 2002 wereRead MoreEssay on Southwest Airlines Company Financial Analysis735 Words   |  3 PagesSouthwest Airlines Company Financial Analysis Five Year Financial Overview Southwest Airlines Co. | 2012 | 2011 | 2010 | 2009 | 2008 | Revenues | Not Available | $15,658.00 M | $12,104.00 M | $10,350.00 M | $11,023.00 M | Stock Price | Not Available | $8.56 | $12.98 | $11.43 | $8.62 | Profit Margin | Not Available | 1.14% | 3.79% | .96% | 1.61% | Net Income | | $178.00 M | $459.00 M | $99.00 M | $178.00 M | Employees | Not Available | 45,392 | 34,901 | 34,726 | 35,499 | Read MoreSouthwest Gas Holdings : Asset Management And Financial Changes In Management810 Words   |  4 PagesFinal Paper: Southwest Gas Holdings SZR As an employee that currently has my company acquisitioned by Centuri Construction Group which is owned by Southwest Gas Holdings (SZR), I took an interest in analyzing this company’s financials for my Final project. I am eagerly awaiting to see what kind of changes in management that this new acquisition will bring. By looking at their financials, I can see how they run their own businesses and will expect it to spill over into mine. Current Ratio I startedRead MoreSouthwest Airlines State Of The Airline Industry930 Words   |  4 Pages Southwest Airlines State in the Airline Industry Edwin Romero Ashford University BUS 690: Business Strategy Dr. David Kalicharan January 12, 2014 Abstract As Southwest Airlines reached their 43rd birthday, it has matured within the airline industry. During the past four decades, Southwest Airlines has maintained its image. However between 2008 and 2013 the profits have been at a loss and Southwest Airlines has had a declining financial performance record. In the end, SouthwestRead MoreEssay on Southwest Airline Company Overview1413 Words   |  6 PagesSOUTHWEST AIRLINES CASE STUDY ASSIGNMENT – SUGGESTED STRUCTURE Cover page Contents page MAIN BODY INTRODUCTION (150 WORDS) Purpose of the report What does Southwest Airlines do? What is the background to the organisation? What industry does it operate in? What are its geographical markets? What products and services does it offer and what are the market segments? What are Southwest Airlines’ mission, vision and values? What generic strategyRead MoreStrategic Management and Personal Media Players1006 Words   |  5 Pagescomputers, personal media players, or smartphones---do you think is most important to Apple’s future growth and profitability? Why? 5. What is your assessment of Apple Computer’s financial performance the past three years? (Use the financial ratios in Table 4.1 on pages 94-96 of the text as a guide in doing your financial analysis.) 6. What recommendations would you make to allow Apple to strengthen its position in its most important markets? What steps should it take to ensure that the iPad becomes aRead MoreJet Blue vs Southwest1141 Words   |  5 PagesMarch 2013 Comparative Analysis: JetBlue VS Southwest This case is a report that compares the financials of two well-known firms in the airline industry, JetBlue and Southwest. JetBlue Airways Corp was established in the year 1998 with a vision of being a leading cost efficient passenger airline with competitive, low rates. The company has been working toward a goal of growing sustainably while also maintaining efficient liquidity. The second firm in this case report, Southwest Airlines Company isRead MoreProfitability and Creditworthiness Analysis for the Southwest Airlines1680 Words   |  7 PagesProfitability and Creditworthiness Analysis for the Southwest Airlines (LUV Ââ€" NYSE symbol) : Various financial ratios are used by managers and investors to analyze companys financial health. In this section we describe return on equity analysis to measure the Southwests performance. ROE is viewed as one of the most important financial ratios. It is used in an effort to evaluate managements ability to monitor and control expenses and to earn a profit on resources committed to the business. ThreeRead MoreSkype: Strategic Management and Sara Lee1472 Words   |  6 PagesComputer’s financial performance the past three years? (Use the financial ratios in Table 4.1 on pages 94-96 of the text as a guide in doing your financial analysis.) 6. What recommendations would you make to allow Apple to strengthen its position in its most important markets? What steps should it take to ensure that the iPad becomes a success in the marketplace and a major contributor to the company’s overall performance? CASE PRESENTATION 2 GAP 1. What does a five-forces analysis reveal