SOUTHWEST AIRLINES's gross profit margin for the fourth quarter of its fiscal year 2014 has increased when compared to the same period a year ago. Even though sales increased, the net income has decreased. SOUTHWEST AIRLINES has weak liquidity. Currently, the Quick Ratio is 0.57 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.
During the same period, stockholders' equity ("net worth") has decreased by 7.64% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.
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|Income Statement||Q4 FY14||Q4 FY13|
|Net Sales ($mil)||4628.0||4428.0|
|Net Income ($mil)||190.0||212.0|
|Balance Sheet||Q4 FY14||Q4 FY13|
|Cash & Equiv. ($mil)||2988.0||3152.0|
|Total Assets ($mil)||20064.0||19345.0|
|Total Debt ($mil)||2692.0||2820.0|
|Profitability||Q4 FY14||Q4 FY13|
|Gross Profit Margin||32.32||27.1|
|Return on Assets||5.66||3.89|
|Return on Equity||16.76||10.27|
|Debt||Q4 FY14||Q4 FY13|
|Share Data||Q4 FY14||Q4 FY13|
|Shares outstanding (mil)||678.74||700.48|
|Div / share||0.06||0.04|
|Book value / share||9.98||10.47|
|Institutional Own %||n/a||n/a|
|Avg Daily Volume||8566097.0||8141344.0|
BUY. The current P/E ratio indicates a discount compared to an average of 36.61 for the Airlines industry and a premium compared to the S&P 500 average of 19.41. For additional comparison, its price-to-book ratio of 4.65 indicates a significant premium versus the S&P 500 average of 2.74 and a discount versus the industry average of 5.08. The current price-to-sales ratio is similar to the S&P 500 average, but it is above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, SOUTHWEST AIRLINES proves to trade at a discount to investment alternatives within the industry.
|LUV 28.12||Peers 36.61||LUV 10.85||Peers 44.00|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.
LUV is trading at a discount to its peers.
Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.
LUV is trading at a significant discount to its peers.
|LUV 12.96||Peers 15.00||LUV 0.26||Peers 0.33|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.
LUV is trading at a discount to its peers.
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.
LUV trades at a discount to its peers.
|LUV 4.65||Peers 5.08||LUV 55.66||Peers -133.06|
Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.
LUV is trading at a valuation on par with its peers.
Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.
LUV is expected to have an earnings growth rate that significantly exceeds its peers.
|LUV 1.69||Peers 1.33||LUV 5.11||Peers 17.45|
Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.
LUV is trading at a significant premium to its industry.
Lower. A sales growth rate that trails the industry implies that a company is losing market share.
LUV significantly trails its peers on the basis of sales growth
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