Southwest Airlines Company (LUV)
Return on equity (ROE)
| 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 stockholders’ equity | US$ in thousands | 10,350,000 | 10,515,000 | 10,687,000 | 10,414,000 | 8,876,000 |
| ROE | 4.49% | 4.42% | 5.04% | 9.38% | -34.63% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $465,000K ÷ $10,350,000K
= 4.49%
Southwest Airlines Company's return on equity (ROE) has displayed a fluctuating trend over the past few years. The ROE was -34.63% as of December 31, 2020, indicating the company had a negative return on equity for that year. However, it significantly improved to 9.38% by December 31, 2021, and continued to decrease to 5.04% by December 31, 2022. Subsequently, the ROE further declined to 4.42% by December 31, 2023, and slightly increased to 4.49% by December 31, 2024.
The positive ROE values from 2021 onwards suggest that Southwest Airlines improved its profitability and efficiency in generating returns for its shareholders. However, the decreasing trend from 2022 to 2024 indicates a potential slowdown in the company's profitability growth or efficiency in utilizing shareholder equity. It would be beneficial for the company to focus on enhancing profitability and operational efficiency to sustain or improve its return on equity in the future.
Peer comparison
Dec 31, 2024