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Happy Flier

In: Business and Management

Submitted By tjbaucu
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Happy Flier:
A Financial Analysis on Southwest Airlines

Thomas J. Baucus

FIN 200


Executive Summary

The purpose of this report is an in-depth analysis on the financial position of Southwest Airlines Co. (LUV). As it stands, Southwest Airlines is a big player in the Regional Airline Industry due to the company’s focus on efficiency and consumer support. The company is prepared to handle the conditions cause by the decline in the economic cycle due to a conservative approach. Southwest Airline’s financial statements and ratios indicate a large increase in operations and profitability in the last three years. However, recent financing activities indicate an increase in current liabilities, PPE and a decrease in long-term debt. Analysts are worried that the company’s market price is inflated and are recommending the company less because of this. Despite these worries, Southwest Airlines is projected to be profitable in the upcoming years.
This report is organized as so: the title page, the executive summary, the introduction, the current financial climate, financial statement and ratio analysis, short and long-term financing, risk management, and at last, the conclusion. A page containing my references used is available at the end of the report.


Southwest Airlines Co. (LUV) is a leader in the regional airlines industry. Yahoo Finance states that “as of December 31, 2012, the company operated 694 aircraft… (and)... served 97 destinations in 41 states.” (Yahoo) Southwest airlines Co. is a great proponent of frequent airline miles and often offers additional services to traveling business men such as restaurants, lodging and car rentals. “The company was founded in 1967 and is headquartered in Dallas, Texas.” The regional airline industry itself is one in the constant threat of bankruptcy. A common occurrence in the...

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