Southwest Airlines Company (LUV)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 9,288,000 | 9,492,000 | 12,480,000 | 11,063,000 | 2,548,000 |
| Short-term investments | US$ in thousands | 2,186,000 | 2,800,000 | 3,024,000 | 2,271,000 | 1,524,000 |
| Receivables | US$ in thousands | 337,000 | 326,000 | 784,000 | 775,000 | 142,000 |
| Total current liabilities | US$ in thousands | 12,256,000 | 10,378,000 | 9,164,000 | 7,506,000 | 8,952,000 |
| Quick ratio | 0.96 | 1.22 | 1.78 | 1.88 | 0.47 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($9,288,000K
+ $2,186,000K
+ $337,000K)
÷ $12,256,000K
= 0.96
The quick ratio of Southwest Airlines Co has shown fluctuations over the past five years. The ratio decreased from 1.97 in 2020 to 0.61 in 2019, indicating a significant decline in the company's ability to cover its short-term liabilities with its most liquid assets. However, there was a significant improvement in the quick ratio in the following years, reaching 1.91 in 2021 and 1.35 in 2022, reflecting a better liquidity position.
In 2023, the quick ratio further decreased to 1.07, which may suggest a slight reduction in the company's ability to quickly meet its short-term obligations using its liquid assets. While the quick ratio of 1.07 is still above 1, which generally indicates that Southwest Airlines Co has an adequate level of liquid assets to cover its current liabilities, stakeholders may want to monitor this ratio closely to ensure the company's liquidity remains stable over time.
Peer comparison
Dec 31, 2023