Name: Gross Profit Margin

Definition: Gross profit margin shows how much profit the company keeps from each dollar of sales after covering the direct cost of making its products or delivering services. High margins suggest strong pricing power or efficient production. Shrinking margins might mean rising costs or tougher competition eating into profits.

Interpretation:
• In '2021', LUV's gross profit margin was 26.1%, showing profitability after production and operational costs. Industry average for Air Freight/Delivery Services in '2021' stood at 12.1%.
• In '2022', LUV's gross profit margin was 20.0%, showing profitability after production and operational costs. The decline from '2021' may indicate some operational or financial challenges. Industry average for Air Freight/Delivery Services in '2022' stood at 16.9%. Industry average increased by 4.8% compared to previous year.
• In '2023', LUV's gross profit margin was 16.2%, showing profitability after production and operational costs. The decline from '2022' may indicate some operational or financial challenges. Industry average for Air Freight/Delivery Services in '2023' stood at 19.8%. Industry average increased by 3.0% compared to previous year.
• In '2024', LUV's gross profit margin was 16.2%, showing profitability after production and operational costs. The increase since '2023' reflects strengthening financial performance. Industry average for Air Freight/Delivery Services in '2024' stood at 20.4%. Industry average increased by 0.6% compared to previous year.
Overall, LUV's gross profit margin has been volatile but showed a downward trend over the past 4 years.

Formula: Gross Profit Margin = (Revenue - COGS) / Revenue

Good Range: Often 20%-60% depending on industry.