GROUP MEMBERS
Clayton Ramer; Mark Ball; Wei Zhao; Zhiyu Fan
February.15.2015
Financial Statement Analysis Project
Contents
INTRODUCTION .....................................................................................................................................3 PART A. PROFITABILITY .....................................................................................................................3 PART B. CREDITWORTHINESS ..........................................................................................................6 PART C. INDUSTRY ANALYSIS ...........................................................................................................8 REFERENCE ........................................................................................................................................... 10 FINANCIAL STATEMENTS ................................................................................................................ 11
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Financial Statement Analysis Project
INTRODUCION This assay takes Southwest Airlines Co. as an example to analyze profitability, creditworthiness and related industrial analysis. For part A, we use profitability analysis to examine year-to-year changes in profitability for Southwest from 2013-2014. For part B, we analyze and discuss the credit risk for the company for 2013 and 1014. For part C, we discuss the company’s industry using the SWOT analysis and the five forces frame work. We also discuss the firm’s strategy and how that strategy is reflected in part A and B
PART A I. PROFITABLITY ANALYSIS
2013
2014
NOPAT (1)
797.47
1,393.67
AVE.NOA (2)
7,090
6,741.5
RNOA (1)÷(2)
11.25%
20.67%
ROE
10.52%
16.1%
II. TWO-LEVEL-ANALYSIS
a) Level one:
2013
2014
RNOA
11.25%
20.67%
NOPM
4.51%
7.5%
NOAT
2.50
2.76
b) Level two: NOAT Analysis (Assets/Sales):
2013
2014
INVENTORY
0.026
0.018
PP&E
0.757
0.768
GOODWILL
0.055
0.052
A/P
0.070
0.065
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Financial Statement Analysis Project
c) Level two: NOPM ANALYSIS
Total revenues
Salaries, wages and benefits Fuel and oil
Maintenance materials and repairs
Aircraft rentals
Landing fees and other rentals Depreciation and amortization Acquisition and integration
Other operating expenses
NOPBT
Tax
NOPAT
