Southwest Airlines Company (LUV)
Receivables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 27,482,000 | 25,857,000 | 23,322,000 | 15,381,000 | 9,048,000 |
| Receivables | US$ in thousands | 178,000 | 337,000 | 326,000 | 784,000 | 775,000 |
| Receivables turnover | 154.39 | 76.73 | 71.54 | 19.62 | 11.67 |
December 31, 2024 calculation
Receivables turnover = Revenue ÷ Receivables
= $27,482,000K ÷ $178,000K
= 154.39
The receivables turnover ratio for Southwest Airlines has seen a notable increase over the years, reflecting the company's ability to efficiently collect outstanding receivables. In December 2020, the ratio stood at 11.67, indicating that on average, Southwest converted its receivables into cash approximately 11.67 times during the year.
By December 2024, the receivables turnover ratio had significantly improved to 154.39, highlighting a substantial enhancement in the efficiency of receivables collection. This sharp increase suggests that Southwest Airlines has been able to streamline its credit and collection processes effectively, translating outstanding receivables into cash at a much faster pace.
The consistent upward trend in the receivables turnover ratio showcases Southwest Airlines' strong management of its accounts receivable and its effectiveness in converting credit sales into cash. This improvement demonstrates the company's strong focus on maintaining healthy cash flows and efficient working capital management over the years.
Peer comparison
Dec 31, 2024