Financial Analyst

FinancialAnalysis-Session13e5STUDENT12.xlsx

Directions

1	Go to Southwest Airlines - investors.southwest.com
2	Scroll down to Financials > select View More
3	Download the PDF of the 2019 Annual Report
4	In the PDF, scroll down to Consolidated Statement of Income.
5	Use the information on the Income Statement to complete Tab 2 (Income Statement) information (click on Income Statement).
6	Use the information on the Consolidated Balance Sheet tab to complete Tab 3 (Balance Sheet) information (click on Balance Sheet).
7	Note that some cells may contain the sum of several numbers from the Annual Report. Make sure your subtotals equal the subtotals on Yahoo Finance. Format cells on all tabs appropriately. Do not include cents. Also, note that the numbers on the Annual Report are in thousands. But, enter exactly as shown on the website. See Tab 6 for examples.
8	Use the information from Tab 2 & 3 to complete the ratios on Tab 4. Format the numbers.
9	Solutions should be computed using formulas. They should not be just a number.
10	Answer the analysis questions on Tag 5 (Analysis)
11	Save file as FinancialAnalysis_yourname

Prepare comparative income statements showing the percent increase or decrease for year 2019 in comparison to year 2018.
Name of Company
	2019	2018	$ Change	% Change
Total Revenue	$ 22,428	$ 21,965	FORMULA	FORMULA
Operating Expenses	$ 19,471	$ 18,759	FORMULA	FORMULA
Operating Income or Loss	FORMULA	FORMULA	FORMULA	FORMULA
Interest Expense	$ 118	$ 131	FORMULA	FORMULA
Capitalized Interest	$ (36)	$ (38)	FORMULA	FORMULA
Interest Income	$ (90)	$ (69)	FORMULA	FORMULA
Other (gains) losses, net	$ 8	$ 18	FORMULA	FORMULA
Net Income from Continuing Operations	FORMULA	FORMULA	FORMULA	FORMULA
Non-recurring Events			FORMULA	FORMULA
Net Income	FORMULA	FORMULA	FORMULA	FORMULA
*all numbers in thousands.
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Prepare common-size comparative balance sheets for years 2019 and 2018. Common-size financial statements are used to reveal changes in the relative importance of each financial statement item. All individual amounts in common-size statements are redefined in terms of common-size percents. A common-size percent is measured by dividing each individual financial statement amount under analysis by the base amount.)
Name of your company
	2019	2018	Common Size % 2019	Common Size % 2018
Cash and Cash Equivalents			FORMULA	FORMULA
ST Investments			FORMULA	FORMULA
Accounts and Other Receivables			FORMULA	FORMULA
Inventory			FORMULA	FORMULA
Prepaid Expenses			FORMULA	FORMULA
Total Current Assets	FORMULA	FORMULA	FORMULA	FORMULA
Flight Equipment			FORMULA	FORMULA
Ground Property & Equipment			FORMULA	FORMULA
Deposits on Flight Equipment			FORMULA	FORMULA
Assets constructed for others			FORMULA	FORMULA
Less Allowance for Depreciation			FORMULA	FORMULA
Goodwill			FORMULA	FORMULA
Other Assets			FORMULA	FORMULA
Total Assets	FORMULA	FORMULA	FORMULA	FORMULA
Total Current Liabilities			FORMULA	FORMULA
Long Term Debt			FORMULA	FORMULA
Other Liabilities			FORMULA	FORMULA
Deferred Long Term Liability Charges			FORMULA	FORMULA
Minority Interest			FORMULA	FORMULA
Negative Goodwill			FORMULA	FORMULA
Total Liabilities	FORMULA	FORMULA	FORMULA	FORMULA
Total Stockholders Equity			FORMULA	FORMULA
*all numbers in thousands
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Compute the following ratios as of December 31, 2019, or for the year ended December 31, 2018, and identify its building block category for financial statement analysis.
(The Building block categories to choose from are 1) Liquidity & Efficiency; 2) Solvency; 3) Profitability; 4) Market Prospects. Indicate by category and not by number listing)
Compute the required ratios using the data provided. Use the average of beginning and ending amounts when appropriate.
	2019	2018
1. Current ratio
2. Quick ratio / Acid-test ratio
3. Accounts receivable turnover		n/a
4. Days' sales uncollected
5. Equity ratio
6. Debt ratio
7. Debt-to-equity ratio
6. Gross Margin Ratio
9. Profit margin ratio
10. Total asset turnover		n/a
11. Return on total assets		n/a
12. Return on common stockholders' equity		n/a

Your grade on this tab will be based on the quality of your answer, not how long your answer is.

1. Based on Tab 2, is your company doing better or worse than last year? Explain your answer based on the Dollar & % Change.

2. Based on Tab 3, is your company doing better or worse than last year? Explain your answer based on the Common Size Analysis.

3. Based on Tab 4 , is your company doing better or worse than last year? Explain your answer.

Use your ACCT 2302 book: Financial and Managerial Accounting, Wild, Shaw, Chiaeppetta, 6e. 2016. Chapter 13 Or use the images below from the text.

Comparative Income Statement Example ($ and % change)

Comparative Balance Sheet Example (Common-size analysis)

Ratios