Southwest Airlines Company (LUV)
Financial leverage ratio
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 33,750,000 | 36,487,000 | 35,369,000 | 36,320,000 | 34,588,000 |
| Total stockholders’ equity | US$ in thousands | 10,350,000 | 10,515,000 | 10,687,000 | 10,414,000 | 8,876,000 |
| Financial leverage ratio | 3.26 | 3.47 | 3.31 | 3.49 | 3.90 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $33,750,000K ÷ $10,350,000K
= 3.26
The financial leverage ratio of Southwest Airlines Company has shown a decreasing trend from 3.90 in December 31, 2020, to 3.26 in December 31, 2024. This indicates that the company has been gradually reducing its reliance on debt to finance its operations over the years. Although the ratio fluctuated slightly during this period, the overall trend suggests that Southwest Airlines has been effectively managing its debt levels. A lower financial leverage ratio generally signifies a lower level of financial risk for the company, as it indicates a smaller proportion of debt in its capital structure relative to equity. This reduction in financial leverage may help enhance the company's financial stability and resilience in the face of economic challenges.
Peer comparison
Dec 31, 2024