Southwest Airlines Company (LUV)

Receivables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	25,857,000	23,322,000	15,381,000	9,048,000	22,426,000
Receivables	US$ in thousands	337,000	326,000	784,000	775,000	142,000
Receivables turnover		76.73	71.54	19.62	11.67	157.93

December 31, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $25,857,000K ÷ $337,000K
= 76.73

The receivables turnover ratio measures how efficiently a company is able to collect payments from its customers. A higher ratio indicates that the company is collecting its accounts receivable more quickly.

Southwest Airlines Co's receivables turnover has shown some fluctuations over the past five years. In 2023, the receivables turnover ratio was 22.61, slightly lower than the previous year's ratio of 22.90. This suggests that Southwest Airlines Co was able to collect its accounts receivable slightly slower in 2023 compared to 2022.

Looking further back, in 2021, the receivables turnover ratio was 11.64, a significant increase from 8.01 in 2020. This indicates that Southwest Airlines Co improved its collection efficiency in 2021 compared to the prior year. In 2019, the ratio was 20.65, higher than in 2023 but lower than the peak seen in 2022.

Overall, the fluctuation in Southwest Airlines Co's receivables turnover ratio over the years may be influenced by various factors such as changes in customer payment behavior, sales volume, and credit policies. It is important for the company to continue monitoring and managing its accounts receivable effectively to ensure timely collections and maintain healthy cash flows.