Southwest Airlines Company (LUV)
Return on assets (ROA)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 465,000 | 465,000 | 539,000 | 977,000 | -3,074,000 |
| Total assets | US$ in thousands | 33,750,000 | 36,487,000 | 35,369,000 | 36,320,000 | 34,588,000 |
| ROA | 1.38% | 1.27% | 1.52% | 2.69% | -8.89% |
December 31, 2024 calculation
ROA = Net income ÷ Total assets
= $465,000K ÷ $33,750,000K
= 1.38%
The return on assets (ROA) of Southwest Airlines Company has shown a mixed performance over the last five years. In December 2020, the ROA was at a negative 8.89%, indicating that the company generated a net loss in relation to its total assets. However, there has been a notable improvement since then, with the ROA increasing to 2.69% in December 2021. This suggests that Southwest Airlines effectively utilized its assets to generate a positive return.
In the following years, the ROA experienced some fluctuations, declining to 1.52% in December 2022, and further to 1.27% in December 2023. Despite these dips, the company managed to bounce back slightly with a ROA of 1.38% by December 2024. This indicates that Southwest Airlines continued to generate positive returns on its assets, although at a lower rate compared to the peak in 2021.
Overall, Southwest Airlines Company's ROA performance demonstrates a mix of challenges and improvements in effectively utilizing its assets to generate returns over the past five years. The fluctuations in ROA highlight the need for the company to continue monitoring and optimizing its asset management strategies to maintain and enhance profitability.
Peer comparison
Dec 31, 2024