Southwest Airlines Company (LUV)
Payables 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 |
| Payables | US$ in thousands | 1,818,000 | 1,862,000 | 2,004,000 | 1,282,000 | 931,000 |
| Payables turnover | 12.14 | 11.29 | 9.25 | 10.95 | 12.17 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $22,062,000K ÷ $1,818,000K
= 12.14
The payables turnover ratio for Southwest Airlines Company has shown a decreasing trend over the past five years, starting at 12.17 in December 31, 2020, and reaching its lowest point of 9.25 in December 31, 2022, before showing signs of improvement in the subsequent years. The ratio measures how efficiently the company is managing its trade credit payments to suppliers. A higher payables turnover ratio indicates that the company is paying off its suppliers more quickly, which could be a positive sign of strong liquidity and efficient working capital management. However, a decreasing trend in the ratio may also suggest that the company is taking longer to pay off its suppliers, potentially signaling liquidity challenges or changes in payment terms. Overall, while the recent increase in the payables turnover ratio in December 31, 2024, to 12.14 indicates an improvement over the previous years, further analysis and comparison with industry benchmarks would provide a more comprehensive assessment of Southwest Airlines' payables management efficiency.
Peer comparison
Dec 31, 2024