The business behind the dividend
| Measure | LUV | Median | Formula |
|---|---|---|---|
| Return on equity | 5.5% | 10.6% | Net income ÷ shareholders’ equity |
| Return on capital employed | 3.3% | 10.0% | Operating income ÷ (equity + total debt) |
| Owner earnings | $-672.00m | $120.90m | Net income + depreciation & amortisation − capital expenditure |
| Free cash flow | $-831.00m | $155.08m | Operating cash flow − capital expenditure |
| Operating margin | 1.5% | 14.3% | Operating income ÷ revenue |
| Net margin | 1.6% | 10.1% | Net income ÷ revenue |
| Debt to equity | 0.62x | 0.73x | Total debt ÷ shareholders’ equity |
| Interest cover | 2.56x | 4.22x | Operating income ÷ interest expense |
| Current ratio | 0.52x | 1.55x | Current assets ÷ current liabilities |
| Long-term debt to working capital | — | — | Long-term debt ÷ (current assets − current liabilities) |
| Cash conversion | 4.18x | 1.66x | Operating cash flow ÷ net income |
| Accruals | -4.8% | -3.1% | (Net income − operating cash flow) ÷ total assets |
Not computed here: Long-term debt to working capital — why a blank is not a zero.
Ten years of it
The same measures, for every year the filings support. One year is a fact; a row is a business.
| Measure | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | Median |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on equity | 5.5% | 4.5% | 4.4% | 5.0% | 9.4% | -34.6% | 23.4% | 25.0% | 34.8% | 28.0% | 5.5% |
| Return on capital employed | 3.3% | 1.9% | 1.2% | 5.4% | 8.3% | -20.1% | 25.3% | 25.4% | 26.3% | 33.2% | 5.4% |
| Operating margin | 1.5% | 1.2% | 0.9% | 4.3% | 10.9% | -42.2% | 13.2% | 14.6% | 16.1% | 17.4% | 4.3% |
| Net margin | 1.6% | 1.7% | 1.8% | 2.3% | 6.2% | -34.0% | 10.3% | 11.2% | 15.9% | 10.8% | 2.3% |
| Debt to equity | 0.62x | 0.65x | 0.76x | 0.76x | 0.99x | 1.14x | 0.19x | 0.28x | 0.34x | 0.36x | 0.62x |
| Current ratio | 0.52x | 0.92x | 1.14x | 1.43x | 1.97x | 2.02x | 0.67x | 0.64x | 0.70x | 0.66x | 0.70x |
| Cash conversion | 4.18x | 0.99x | 6.80x | 7.03x | 2.38x | — | 1.73x | 1.98x | 1.17x | 1.97x | 1.98x |