Southwest Airlines Co (WBO:LUV) ROCE % : -4.00% (As of Mar. 2024)

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What is Southwest Airlines Co ROCE %?

ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Southwest Airlines Co's annualized ROCE % for the quarter that ended in Mar. 2024 was -4.00%.

Southwest Airlines Co ROCE % Historical Data

The historical data trend for Southwest Airlines Co's ROCE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Southwest Airlines Co ROCE % Chart

Southwest Airlines Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROCE %

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17.44

-17.28

6.71

4.08

3.48

Southwest Airlines Co Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROCE %	Get a 7-Day Free Trial															-2.34	15.35	4.80	-3.67	-4.00

Southwest Airlines Co ROCE % Calculation

Southwest Airlines Co's annualized ROCE % for the fiscal year that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	796.873	/	( ( (33388.336 - 9796.832)	+	(33458.579 - 11238.752) )	/ 2 )
	=	796.873	/	( (23591.504	+	22219.827)	/ 2 )
	=	796.873	/	22905.6655
	=	3.48 %

Southwest Airlines Co's ROCE % of for the quarter that ended in Mar. 2024 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Mar. 2024 )		(Q: Dec. 2023 )		(Q: Mar. 2024 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Mar. 2024 )		(Q: Dec. 2023 )		(Q: Mar. 2024 )
	=	-883.2	/	( ( (33458.579 - 11238.752)	+	(33136.56 - 11247) )	/ 2 )
	=	-883.2	/	( ( 22219.827	+	21889.56 )	/ 2 )
	=	-883.2	/	22054.6935
	=	-4.00 %

(1) Note: The EBIT data used here is four times the quarterly (Mar. 2024) EBIT data.

Southwest Airlines Co (WBO:LUV) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

Southwest Airlines Co ROCE % Related Terms

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Southwest Airlines Co (WBO:LUV) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » Southwest Airlines Co (WBO:LUV) » Definitions » ROCE %

Comparable Companies

Traded in Other Exchanges

LUV:USA LUV:Mexico SWN:Germany S1OU34:Brazil

Address

P.O. Box 36611, Dallas, TX, USA, 75235-1611

Website

https://www.southwest.com

Southwest Airlines is the largest domestic air carrier in the United States by passengers boarded. Southwest operates over 700 aircraft in an all-Boeing 737 fleet. Despite offering some longer routes and a few perks for business travelers, the airline predominantly specializes in short-haul, leisure flights, using a point-to-point network. Southwest operates a low-cost carrier business model.