Southwest Airlines Company (LUV)
Current ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total current assets | US$ in thousands | 11,274,000 | 13,955,000 | 14,808,000 | 18,036,000 | 15,173,000 |
| Total current liabilities | US$ in thousands | 12,276,000 | 12,256,000 | 10,378,000 | 9,164,000 | 7,506,000 |
| Current ratio | 0.92 | 1.14 | 1.43 | 1.97 | 2.02 |
December 31, 2024 calculation
Current ratio = Total current assets ÷ Total current liabilities
= $11,274,000K ÷ $12,276,000K
= 0.92
The current ratio of Southwest Airlines Company has exhibited a gradual decline over the past five years, starting at 2.02 in December 31, 2020, and decreasing to 1.97 in December 31, 2021, 1.43 in December 31, 2022, 1.14 in December 31, 2023, and further dropping to 0.92 by December 31, 2024.
This downward trend indicates that Southwest Airlines may be facing challenges in meeting its short-term obligations with its current assets as compared to its current liabilities. A current ratio below 1 typically raises concerns about the company's liquidity and ability to cover its immediate debt obligations.
Southwest Airlines may need to focus on managing its current assets and liabilities more effectively to improve its current ratio and overall financial health. Further analysis of the company's working capital management and liquidity position would provide more insights into its financial stability.
Peer comparison
Dec 31, 2024