Southwest Airlines Co's Days Sales Outstanding for the
three
months ended in Mar. 2026 was 1.69.
Southwest Airlines Co's Days Inventory for the
three
months ended in Mar. 2026 was 12.4.
Southwest Airlines Co's Days Payable for the
three
months ended in Mar. 2026 was 6.11.
Therefore, Southwest Airlines Co's Cash Conversion Cycle (CCC) for the
three
months ended in Mar. 2026 was 7.98.
Southwest Airlines Co (FRA:SWN) Cash Conversion Cycle Explanation
Generally, the lower this number is, the better for the company. Although it should be combined with other metrics (such as ROE % and ROA %), it can be especially useful for comparing close competitors, because the company with the lowest CCC is often the one with better management.
Be Aware
CCC is most effective with retail-type companies, which have inventories that are sold to customers. Consulting businesses, software companies and insurance companies are all examples of companies for whom this metric is meaningless.
The CCC is one of several tools that can help you evaluate management, especially if it is calculated for several consecutive time periods and for several competitors. Decreasing or steady CCCs are good, while rising ones should motivate you to dig a bit deeper.
Southwest Airlines Co Cash Conversion Cycle Related Terms
Southwest Airlines Co Cash Conversion Cycle Historical Data
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The historical data trend for Southwest Airlines Co's Cash Conversion Cycle 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.
FRA:SWN vs AAL, CPA, ALK: Cash Conversion Cycle Comparison
For the Airlines subindustry, Southwest Airlines Co's Cash Conversion Cycle, along with its competitors' market caps and Cash Conversion Cycle data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Southwest Airlines Co Cash Conversion Cycle vs Transportation Industry
For the Transportation industry and Industrials sector, Southwest Airlines Co's Cash Conversion Cycle distribution charts can be found below:
* The bar in red indicates where Southwest Airlines Co's Cash Conversion Cycle falls into.
Southwest Airlines Co Cash Conversion Cycle Calculation
Cash Conversion Cycle (CCC) measures how fast a company can convert cash on hand into even more cash on hand. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.
Cash Conversion Cycle is one of several measures of management effectiveness.
Southwest Airlines Co's Cash Conversion Cycle for the fiscal year that ended in Dec. 2025 is calculated as
* 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.
Southwest Airlines Co (FRA:SWN) has a Cash Conversion Cycle of 7.98 as of Mar. 2026. Cash conversion cycle equals sum of days inventory and days sales outstanding less days payable. View historical data on Southwest Airlines Co and its competitors.
Is Southwest Airlines Co's Cash Conversion Cycle too high?
Southwest Airlines Co's current Cash Conversion Cycle is 7.98. The Transportation industry median Cash Conversion Cycle is 20.26. Southwest Airlines Co's value of 7.98 is 60.6% below this industry median. Overall, Southwest Airlines Co has a GF Score™ of 81/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Southwest Airlines Co's Cash Conversion Cycle compare to AAL and CPA?
Southwest Airlines Co's Cash Conversion Cycle of 7.98 can be compared against companies in the Transportation industry. The industry median Cash Conversion Cycle is 20.26. Southwest Airlines Co's value of 7.98 is 60.6% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Cash Conversion Cycle for a Transportation company?
The median Cash Conversion Cycle among Transportation companies is 20.26, based on 1,008 companies in the industry. Companies in the top quartile (top 25%) have a Cash Conversion Cycle significantly above this median, while those in the bottom quartile fall well below. However, Cash Conversion Cycle should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Southwest Airlines Co's current Cash Conversion Cycle of 7.98 is 60.6% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Cash Conversion Cycle mean?
A high Cash Conversion Cycle can signal that a stock is expensive relative to its fundamentals. Cash conversion cycle equals sum of days inventory and days sales outstanding less days payable. View historical data on Southwest Airlines Co and its competitors. For the Transportation industry, the median Cash Conversion Cycle is 20.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Southwest Airlines Co's current Cash Conversion Cycle is 7.98. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Southwest Airlines Co stock overvalued right now?
Based on GuruFocus' analysis, Southwest Airlines Co (FRA:SWN) is currently considered Modestly Overvalued. The stock's GF Value™ is €35.85, compared to a current price of €45.14 — trading 25.9% above its estimated fair value. The current Cash Conversion Cycle is 7.98 and 60.6% below the Transportation industry median of 20.26. Southwest Airlines Co's overall GF Score™ is 81/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Cash Conversion Cycle calculated?
Cash Conversion Cycle is calculated from a company's financial statements. For Southwest Airlines Co (FRA:SWN), the current Cash Conversion Cycle is 7.98 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Southwest Airlines Co (FRA:SWN) Overvalued in 2026?
Based on GuruFocus' analysis, Southwest Airlines Co stock appears to be overvalued.
The current stock price of €45.14 is trading 25.9% above its estimated GF Value™ of €35.85.
GuruFocus considers Southwest Airlines Co to be Modestly Overvalued.
Key valuation signals for FRA:SWN:
Cash Conversion Cycle: 7.98
GF Value™: €35.85 vs. price of €45.14 (25.9% above fair value)
Industry Position: 60.6% below the Transportation median
No single metric tells the full story. See the FRA:SWN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Southwest Airlines is the largest domestic air carrier in the United States by passengers boarded. Southwest operates nearly 800 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 operated with a simple cabin configuration in a point-to-point network. In early 2026, Southwest modified its cabins to offer some rows with extra legroom, its ticketing process and merchandising to offer assigned seats, and more fare categories to include a basic economy class that appears for the first time in travel aggregators' search results and more directly competes with other airlines' offerings.
81GF Score
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