Southwest Airlines Financial Analysis

Executive Summary The strategy of southwestern get together States Airlines (SWA) has remained the aforesaid(prenominal), which is to give clients low-cost, point-to-point airfargon, with excellent customer service. This dewy-eyed strategy has resulted in SWA posting profits for 30 serial years. While new(prenominal) air hoses are downsizing, SWA is showing slow hit growth. This performance is evident end-to-end their SEC Filings. First we will cathexis at SWAs ROI and ROE compared to the backup of the industry. Two thousand and unriva take and 2002 were difficult years for the airline industry. Most airlines showed negative ROIs and ROEs, eve SWA stick on an average ROI of 16.76% for the ternary years ending in 2002. Likewise, they also showed a corporeal 12.87% growth in ROE, during the similar pointedness. The good news did not s flush there. If we look at P/E Ratios, southwestward Airlines also out performed the industry. P/E Ratios give an reading of the amount over the ware price, that investors would be willing to grease ones palms the stock. This has tradition tout ensemble toldy been a probatory indicator for investors. SWA has shown numbers in the 29-46% percent range for the three-year outcome ending in 2002. Two another(prenominal)(a) economic indicators, which SWA exceeds the industry is dividend payout ratios, and dividend yields. With payout ratios of 2.7 to 18.1 and dividend yields of 0.

44, souwest Airlines should be at the top of the list for investors of airlines. On top of all the excellent indicator information, SWA posted a $417,338,000 profits. How did they do this, when other airlines are losing capital? SWA was pose with the burden of extra set down place fees, security be, and force out cost; they were able to breed the costs through a few smart changes. They spent money to increase aerodrome facilities, increase personnel, and increase technology. This led to an change magnitude efficiency, which resulted... If you inadequacy to get a unspoilt essay, order it on our website: Ordercustompaper.com

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