Question

Southwest Airlines' "Outstanding letter of credit" has been decreasing from 2014 to 2017, what does this...

Southwest Airlines' "Outstanding letter of credit" has been decreasing from 2014 to 2017, what does this indicate, is it good or bad ?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Yes, it is good indication for Southwest Airlines. As we know that outstanding letter of credit refers to the credit letter issued by bank in favor of buyer who is responsible for making payment to the seller.

In other words we can say when a bank gives letter of credit then it means that bank will be liable for payment if buyer not make such payment.

Thus if such outstanding letter of credit is decreasing for Southwest Airlines then it means that liabilities for southwest airlines is decreasing. It means that financial position of this organization is improving because Southwest Airlines does not need more letter of credit from its’ bank that is why it is good symbol for Southwest Airlines. It shows better financial position of this organization.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
How has COVID-19 impacted Southwest Airlines shareholders and stakeholders? What are the issues?
How has COVID-19 impacted Southwest Airlines shareholders and stakeholders? What are the issues?
1. From the most recent SEC 10K report from southwest airlines. What type of information did...
1. From the most recent SEC 10K report from southwest airlines. What type of information did you find in the report? What information in the report will be of most value to analysts and stockholders? 2. Should a financial analyst approach their work with a degree of skepticism, why or why not? What will be the main areas of skepticism as you review the SEC 10K report from southwest airlines?
You recently received a letter from Cut-to-the-Chase National Bank that offers you a new credit card...
You recently received a letter from Cut-to-the-Chase National Bank that offers you a new credit card that has no annual fee. It states that the annual percentage rate (APR) is 18% on outstanding balances. If the card is billed monthly with monthly compounding, what is the effective annual rate? (round to two decimals) None of the available choices 1.50% 19.56% 6.00% 17.23% 18.00%
Allowance Method The Huntington Company, which has been in business for three years, makes all of...
Allowance Method The Huntington Company, which has been in business for three years, makes all of its sales on account and does not offer cash discounts. The firm's credit sales, collections from customers, and write-offs of uncollectible accounts for the three-year period are summarized below: Year Sales Collections Accounts Written Off 2012 $630,000 $574,000 $4,200 2013 800,000 760,000 6,700 2014 870,000 844,000 7,300 Required If the Huntington Company had used the allowance method of recognizing credit losses and had provided...
Allowance Method Steinbrook Company, which has been in business for three years, makes all of its...
Allowance Method Steinbrook Company, which has been in business for three years, makes all of its sales on account and does not offer cash discounts. The firm's credit sales, collections from customers, and write-offs of uncollectible accounts for the three-year period are summarized below: Year Sales Collections Accounts Written Off 2012 $755,000 $733,000 $4,300 2013 880,000 864,000 4,800 2014 976,000 938,000 4,500 Required If Steinbrook Company used an allowance method of recognizing credit losses and provided for such losses at...
Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the...
Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (195 seats × 40% occupancy × $210 ticket price) $ 16,380 100.0 % Variable expenses ($17.00 per person) 1,326 8.1 Contribution margin 15,054 91.9 % Flight expenses: Salaries, flight crew $...
have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s...
have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (195 seats × 40% occupancy × $230 ticket price) $ 17,940 100.0 % Variable expenses ($19.00 per person) 1,482 8.3 Contribution margin 16,458 91.7 % Flight expenses: Salaries, flight crew $ 1,900...
Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the...
Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (175 seats × 40% occupancy × $240 ticket price) $ 16,800 100.0 % Variable expenses ($18.00 per person) 1,260 7.5 Contribution margin 15,540 92.5 % Flight expenses: Salaries, flight crew $...
Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the...
Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (175 seats × 40% occupancy × $230 ticket price) $ 16,100 100.0 % Variable expenses ($17.00 per person) 1,190 7.4 Contribution margin 14,910 92.6 % Flight expenses: Salaries, flight crew $...
Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the...
Profits have been decreasing for several years at Pegasus Airlines. In an effort to improve the company’s performance, the company is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (175 seats × 40% occupancy × $200 ticket price) $ 14,000 100.0 % Variable expenses ($18.00 per person) 1,260 9 Contribution margin 12,740 91 % Flight expenses: Salaries, flight crew $...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT