CASE STUDY: HISTORICAL FINANCIAL ANALYSIS FOR SOUTHWEST AIRLINES
Your Case Study: Historical Financial Analysis Assignment paper must include:
1. Historical Financial Statements (Income Statement, Balance Sheet and Statement of Cash Flows) from the 3 most current years for Southwest Airlines. These should be downloaded from the SEC website. The financial statements must include horizontal (shown between the years) and vertical analysis (shown to the right of the last year of historical data).
2. Ratio analysis for the ratios shown on Table 1 in the Guide to Case Analysis (CA) of the textbook:
a. Profitability ratios
b. Liquidity ratios
c. Leverage ratios
d. Activity ratios
e. Price-to-earnings ratio
f. The changes between years are included in the calculations.
3. Competitor ratios to compare with the ratios that were calculated in item 2. These should be included on the same tab as the ratio analysis for Southwest Airlines.
4. Financial analysis should include comparisons to Southwest Airline’s main competitor as well as to the industry. How does the financial position of Southwest Airlines influence the strategic direction of the company? This section should not be used to define what each ratio is rather it should clearly provide analysis based on the calculations as to the strategic choices and implications of the firm’s financial position. A compare and contrast with the main competitor should be included in this section of narrative.
Options to Download SEC Financial Data into Excel Spreadsheets:
There are two ways to pull financial data in Excel format from the SEC site, depending on how recent the information is.
OPTION 1: For filings that are a year or two old
• Go to www.sec.gov.
o In the Filings & Forms box, click on Search for Company Filings.
o Then click on Company or fund name, ticker symbol, CIK (Central Index Key), file number, state, country, or SIC (Standard Industrial Classification).
o Enter either a company name or ticker symbol into the appropriate box. (Note: it may be easier to use a ticker symbol because this guarantees you have the right company.) Choose Find Companies.
o On the next screen, select the appropriate filing or filter by filing type (10-K).
o Newer filings have two button options: Documents and Interactive Data. Select Interactive Data if that is an option.
o Once in Interactive Data, select financial statements. A drop-down box will appear in the left-hand column. Select the statement that you want. Then, click View Excel Document above the left-hand column.