Question

A condensed income statement for Southwest Airlines and a partially completed vertical analysis are presented below.


Required:
1. Complete the vertical analysis by computing each line item (a)–(f) as a percentage of sales revenues. Round to the nearest whole percentage.
2. Does the percentage that you calculated in 1(a) suggest that Southwest tried to increase its profit by cutting repairs and maintenance costs in 2010 compared to 2009?
3. Refer to the percentages that you calculated in 1(c) and (f). Is Southwest’s net profit margin improving ordeclining?


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  • CreatedFebruary 27, 2015
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