Alternative ratios for evaluating long-term financial solvency include the total-debt-to-total-equity ratio and the total-debt-to-total-assets ratio. The airline originally based itself out of Love Field rather than the larger and newer Dallas-Fort Worth International to comply with a blatantly pointed law called the Wright Amendment. An improving bottomline implies that the company is growing its profits. According to these financial ratios Southwest Airlines Co. In general, investors look for a company with a current ratio of 2:1, meaning current assets twice as large as current liabilities. The formula used to calculate return on assets divides yearly by total assets. Overall, Southwest had the best growth over the time period from 2008 to 2012.
As of 2015, traveling by air is a household concept. Warren Buffett and the Interpretation of Financial Statements. JetBlue's average collection period consistently decreased for each of the three years calculated from 9. The gurus listed in this website are not affiliated with GuruFocus. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. Financial ratios allow for comparisons between companies, between industries and also between a single company and its industry average or peer group average.
Past performance is a poor indicator of future performance. Southwest has the best activity ratio's overall. One thing you learn when examining airline financial statements is how carriers are at the mercy of swings in the price of jet fuel. Financial ratios can also be used by managers within a firm, by current and potential shareholders owners of a firm, and by a firm's creditors. This generally means that Southwest is more effective in generating revenues from their investment in property, plant and equipment. The fol lowing figures and ratios are extremely important to consider when determining the current fi n ancial performance of each company.
JetBlue hedged 21% of its fuel last year. That the sponsor of an amendment that restricted flight, disgraced U. Fundamental company data provided by Morningstar, updated daily. In 2012, JetBlue had a profit margin of 7. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. Readers should not assume that the information contained on this site has been updated or otherwise contains current information.
Gross Profit Margin Inconsistent, Lower than the industry average, Lower than jetblue Slightly increasing from 2011-2013 Net Profit Margin Inconsistent Half of industry average. In contrast to JetBlue, Southwest maintains that convenience and savings are the biggest indulgences an airline can offer its customers. The idea was to protect investments made by the city in the newer airport, and by the larger established airlines that had moved their operations there. Financial analysis of Southwest Airlines involves more than just checking the , by looking at the financial statements of the company in detail. This shows that Southwest's sales experienced significant growth over the five years.
As its name suggests, Southwest began as a regional airline. Leverage: Jet Blue has much higher and more consistent leverage ratios. If Southwest Airlines Co has good long-term prospects, it may be able to borrow against those prospects to meet current obligations. This means that they are getting a better return on their assets. The income statement is generated for a specific period of time, typically a year or a quarter.
Southwest Airlines Co has a current ratio of 0. To learn more visit www. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Activity Ratios: Both Southwest and JetBlue had increasing fixed asset turnovers for each of the three years calculated. JetBlue was founded in 1999 by, as these things have a way of happening, a former Southwest executive. Southwest operates over Boeing 737 aircraft in numerous cities. Please note that this feature requires full activation of your account and is not permitted during the free trial period.
The resulting value is expressed as a percentage. Stock Price, historical and current end-of-day data provided by eoddata. Because business operations differ in each industry, it is always more useful to compare companies within the same industry. Faster growth can justify higher price multiples. The ratio illustrates a company's ability to remain solvent. Ratios valuation of Southwest Airlines Co. Alternate metrics to the quick ratio include the and the ratio.