Southwest Airlines Company (LUV)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 22,062,000 | 21,022,000 | 18,544,000 | 14,036,000 | 11,328,000 |
| Inventory | US$ in thousands | 800,000 | 807,000 | 790,000 | 537,000 | 414,000 |
| Inventory turnover | 27.58 | 26.05 | 23.47 | 26.14 | 27.36 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $22,062,000K ÷ $800,000K
= 27.58
Southwest Airlines Company's inventory turnover has shown a consistent trend over the past five years. The ratio was 27.36 in December 31, 2020, decreased slightly to 26.14 in December 31, 2021, and further declined to 23.47 in December 31, 2022. However, there was a recovery in December 31, 2023, with a ratio of 26.05 and a subsequent increase to 27.58 in December 31, 2024.
A high inventory turnover ratio indicates that the company is efficiently managing its inventory levels, selling goods quickly, and replenishing stock in a timely manner. On the other hand, a lower ratio may suggest overstocking or slow sales, leading to potential obsolescence or holding costs.
Southwest Airlines Company's inventory turnover ratios indicate fluctuations in inventory management efficiency, which may be influenced by various factors such as demand variability, supply chain disruptions, or changes in business operations. Monitoring this ratio can help assess the company's inventory control practices and potential impacts on financial performance.
Peer comparison
Dec 31, 2024