Southwest Airlines Financial Analysis

Executive Summary The strategy of southwestern joined States Airlines (SWA) has remained the aforesaid(prenominal), which is to give clients low-cost, point-to-point airf atomic number 18, with excellent customer service. This dewy-eyed strategy has resulted in SWA posting profits for 30 serial years. While new(prenominal) airlines are downsizing, SWA is showing slow smash growth. This performance is evident passim their SEC Filings. First we will front at SWAs ROI and ROE compared to the peace of the industry. Two thousand and incomparable and 2002 were difficult years for the airline industry. Most airlines showed negative ROIs and ROEs, until now SWA stick on an average ROI of 16.76% for the triplet years ending in 2002. Likewise, they also showed a all-encompassing-blooded 12.87% growth in ROE, during the alike(p) pointedness. The good news did non s turn over there. If we look at P/E Ratios, souwest Airlines also out performed the industry. P/E Ratios give an index of the amount over the intersection price, that investors would be willing to obtain the stock. This has tradition in all toldy been a probatory indicator for investors. SWA has shown numbers in the 29-46% percent range for the three-year goal ending in 2002. Two an new(prenominal)(prenominal) 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, southwesterly 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 constitute with the burden of extra land place fees, security be, and violence cost; they were able to bobby pin the costs through a few smart changes. They dog-tired money to increase airport facilities, increase personnel, and increase technology. This take to an change magnitude efficiency, which resulted... If you requirement to get a full essay, order it on our website: Ordercustompaper.com

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