Income statements "by nature" and analysis of company performance: an application of US airlines companies

Hervé Stolowy (), Yuan Ding and C.Richard Baker

No 780, HEC Research Papers Series from HEC Paris

Abstract: Since September 11, 2001; and during the ensuing economic slowdown, U.S airline companies have experienced significant financial difficulties, including bankruptcies and near bankruptcies on the part of several major carriers. In an economic setting where U.S. airlines are struggling to achieve or maintain profitability, it is important for accountants, auditors and financial analysts to be able to analyze the relative performance of airline companies. In the airline industry, income statements are normally prepared "by nature" rather than "by function". This differs from the usual presentation found in the income statements of most American companies. This case demonstrates how to perform a comparative financial statement analysis when an income statement is prepared "by nature", by applying a tool called the "Statement of Intermediate Balances". The three companies studied in this case are United Airlines, Delta Air Lines and Southwest Airlines

Keywords: financial statement analysis; income statement format; income statement by nature; income statement by function; statement of intermediate balances (search for similar items in EconPapers)
JEL-codes: L15 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2003-01-01
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Working Paper: Income statements "by nature" and analysis of company performance - an application to U.S. Airlines Companies (2003)
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