Southwest Airlines Company (LUV)
Operating return on assets (Operating ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 224,000 | 1,017,000 | 1,721,000 | -3,816,000 | 2,957,000 |
| Total assets | US$ in thousands | 36,487,000 | 35,369,000 | 36,320,000 | 34,588,000 | 25,895,000 |
| Operating ROA | 0.61% | 2.88% | 4.74% | -11.03% | 11.42% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $224,000K ÷ $36,487,000K
= 0.61%
Southwest Airlines Co's operating return on assets (operating ROA) has fluctuated significantly over the past five years. In 2023, the operating ROA stood at 0.61%, a notable decrease from the previous year's figure of 2.88%. The positive trend observed in 2022 reversed the negative trajectory seen in 2021 and 2020 when the operating ROA was -3.41% and -13.83%, respectively. In 2019, the company exhibited a strong operating ROA of 11.42%.
The declining trend in the operating ROA from 2019 to 2020 and the subsequent recovery in the following years indicate potential challenges faced by Southwest Airlines Co in generating operating profits relative to its asset base. It is vital for the company to closely monitor and address the factors impacting its operating ROA to ensure sustainable profitability and efficient asset utilization in the future.
Peer comparison
Dec 31, 2023