Southwest Airlines uses its assets very productively. Its turnaround time, or the time that its airplanes sit on their ground while they are being loaded and unloaded, is the lowest in the airline industry. In terms of the primary financial objectives of a firm, this attribute is a measure of Southwest's:
A) efficiency
B) effectiveness
C) stability
D) liquidity
E) profitability

Question

Quizplus · Accepted Answer

Southwest Airlines' ability to use its assets productively and have the lowest turnaround time in the industry is a measure of efficiency. Efficiency is the ability of a company to use its resources in the most productive way possible to generate maximum output with minimum input. In this case, Southwest is minimizing the time its airplanes are sitting on the ground, which maximizes the time they are in the air generating revenue for the company.

Southwest Airlines Uses Its Assets Very Productively