Question: A condensed income statement for Southwest Airlines and a partially

A condensed income statement for Southwest Airlines and a partially completed vertical analysis follow.
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 the decline in fuel costs in 2013 contributed to an increase in Southwest’s profit in 2013 compared to 2012?
3. Refer to the percentages that you calculated in 1(c) and (f). Is Southwest’s net profit margin improving or declining?

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  • CreatedNovember 02, 2015
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