Expedia Group Inc. (NASDAQ:EXPE)

Debt to Equity

The debt to equity ratio remained relatively stable between 2017 and 2018, at about 0.94 and 0.91 respectively. However, it increased significantly to 1.24 in 2019 and surged further to 3.24 in 2020, reaching 4.11 by 2021. When including operating lease liabilities, the ratio follows a similar but slightly higher trend, moving from 0.94 in 2017 to 4.32 in 2021. This indicates a marked rise in leverage over the period, particularly during and after 2019.

Debt to Capital

The debt to capital ratio also showed stability from 2017 to 2018 at 0.48, before increasing to 0.55 in 2019. It further escalated to 0.76 in 2020 and 0.80 in 2021. Including operating lease liabilities increases these values slightly, ending at 0.81 in 2021. This signifies a growing proportion of debt within the company's overall capital structure in recent years.

Debt to Assets

This ratio stayed fairly steady at around 0.21 to 0.23 from 2017 through 2019. A notable jump occurred in 2020, reaching 0.44, followed by a slight decrease to 0.39 in 2021. When operating lease liabilities are considered, the debt to assets ratio rises to 0.41 in 2021, reflecting increased liabilities relative to total assets primarily in 2020 and 2021.

Financial Leverage

Financial leverage increased steadily throughout the period, rising from 4.09 in 2017 to 4.39 in 2018, then climbing to 5.40 in 2019. A sharper increase is observed in 2020 at 7.38, followed by a significant jump to 10.48 in 2021. This indicates that the company has been progressively using more debt financing relative to equity, particularly in the last two years.

Interest Coverage

Interest coverage ratios improved from 3.29 in 2017 to 5.48 in 2019, suggesting increasing ability to meet interest obligations with earnings. However, the ratio dropped sharply to -7.75 in 2020, reflecting negative operating earnings or substantial impairments affecting coverage. A partial recovery occurred in 2021 with the ratio rising to 0.89, yet it remained well below pre-2020 levels, indicating ongoing challenges in comfortably covering interest expenses.

Fixed Charge Coverage

A similar trend is evident in fixed charge coverage, which increased gradually from 2.19 in 2017 to 3.26 in 2019. It then deteriorated substantially to -4.29 in 2020, likely due to negative earnings or increased fixed charges, and improved modestly in 2021 to 0.52. The coverage remains low, signaling limited capacity to cover fixed charges from operational earnings.

Total Debt

Total debt exhibited a fluctuating yet overall increasing trend over the period analyzed. Starting at 4,249 million USD at the end of 2017, it decreased to 3,717 million USD in 2018 before rising to 4,938 million USD in 2019. There was a significant increase in 2020 to 8,216 million USD, followed by a slight rise to 8,450 million USD in 2021. This indicates an overall upward trajectory in debt levels, particularly marked by a sharp increase beginning in 2020.

Total Stockholders’ Equity

Stockholders’ equity showed a consistent decline throughout the period. From 4,522 million USD at the end of 2017, it decreased steadily each year to 4,104 million USD in 2018, 3,967 million USD in 2019, and then more sharply to 2,532 million USD in 2020. By the end of 2021, the equity further diminished to 2,057 million USD. This trend suggests a notable reduction in the net worth attributable to shareholders over time.

Debt to Equity Ratio

The debt to equity ratio reflects a significant rise, indicating increasing leverage. The ratio remained below or close to 1 from 2017 to 2018 (0.94 and 0.91 respectively), indicating near parity between debt and equity. In 2019, it increased to 1.24, showing debt exceeding equity for the first time in the period. The leverage expanded sharply in 2020 to 3.24, and further escalated to 4.11 by the end of 2021. This substantial increase in the leverage ratio corresponds with the rising debt and declining equity, signalling heightened financial risk.

Total debt (including operating lease liability)

The total debt shows a fluctuating but overall increasing trend over the five-year period. Initially, the debt decreased from 4,249 million USD in 2017 to 3,717 million USD in 2018, suggesting an effort to reduce debt. However, it markedly increased to 5,589 million USD in 2019 and surged further in 2020 to 8,855 million USD. The debt level stabilized somewhat in 2021, ending slightly higher at 8,887 million USD.

Total Expedia Group, Inc. stockholders’ equity

The stockholders’ equity consistently declined throughout the period. Starting at 4,522 million USD in 2017, it decreased modestly to 4,104 million USD in 2018 and then continued downward to 3,967 million USD in 2019. This declining trend accelerated in 2020 and 2021, with equity dropping to 2,532 million USD and 2,057 million USD, respectively. This diminishing equity base indicates a reduction in net assets attributable to shareholders.

Debt to equity (including operating lease liability) ratio

The debt-to-equity ratio reflects the interplay between rising debt and declining equity. Initially, the ratio was relatively stable and below 1.0 in 2017 (0.94) and 2018 (0.91), indicating a balanced capital structure. The ratio increased significantly in 2019 to 1.41, signaling a shift toward greater leverage. This trend intensified in 2020 and 2021 with the ratio reaching 3.5 and 4.32, respectively, reflecting a substantial increase in financial leverage and potential risks related to increased indebtedness relative to shareholders' equity.

Summary

Overall, the financial data indicate an increasing reliance on debt financing over the period, which is coupled with a consistent decline in shareholder equity. This combination has resulted in a sharp rise in the debt-to-equity ratio, especially from 2019 onward, signaling heightened financial risk. The trend suggests the company may have leveraged its balance sheet significantly, which could impact its financial stability and flexibility going forward.

Total Debt

The total debt showed an overall increasing trend from 2017 to 2021. Beginning at US$4,249 million in 2017, it decreased slightly to US$3,717 million in 2018, then increased steadily to US$4,938 million in 2019. A significant rise occurred in 2020, with debt reaching US$8,216 million, followed by a marginal increase to US$8,450 million in 2021. This indicates a substantial accumulation of debt in the latter two years of the period.

Total Capital

Total capital exhibited fluctuations over the five-year period. Starting at US$8,771 million in 2017, it decreased to US$7,821 million in 2018. This was followed by an increase in 2019 to US$8,905 million and a marked rise to a peak of US$10,748 million in 2020. However, in 2021, total capital declined slightly to US$10,507 million, suggesting some variability but an overall upward movement compared to earlier years.

Debt to Capital Ratio

The debt to capital ratio increased steadily over the period, reflecting a rising proportion of debt financing relative to total capital. The ratio remained stable at 0.48 in both 2017 and 2018, then rose to 0.55 in 2019. There was a pronounced increase to 0.76 in 2020, followed by a further increase to 0.80 in 2021. This trend signals increased leverage and a higher reliance on debt as a component of the company's capital structure.

The financial data indicates several notable trends in leverage and capital structure over the five-year period ending December 31, 2021.

Total Debt (Including Operating Lease Liability)

The total debt level exhibited a significant increase from US$4,249 million in 2017 to US$8,887 million in 2021. There was a decrease in 2018 to US$3,717 million, followed by a substantial rise in 2019. The upward trend became more pronounced in 2020 and continued into 2021, reflecting increased borrowing or financing obligations.

Total Capital (Including Operating Lease Liability)

Total capital similarly increased over the period, rising from US$8,771 million in 2017 to a peak of US$11,387 million in 2020, before a slight reduction to US$10,944 million in 2021. This suggests an overall expansion in the firm's capital base, although the dip in 2021 may indicate some capital restructuring or reduced equity levels.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio remained stable at 0.48 during 2017 and 2018 but increased markedly from 0.58 in 2019 to 0.78 in 2020, reaching 0.81 by the end of 2021. This rising ratio suggests a heavier reliance on debt financing relative to the total capital, indicating an increase in financial leverage and potentially higher financial risk over the period.

Overall, the data reveals a trend towards greater indebtedness and higher leverage, particularly after 2018. The increase in total debt outpaced the growth in total capital, leading to a higher debt to capital ratio. This pattern may reflect strategic decisions to increase leverage for growth, acquisitions, or other corporate purposes, but also signals increased credit risk exposure in the most recent years reported.

Total Debt

The total debt figures reveal a fluctuating trend over the five-year period. Initially, the debt decreased from $4,249 million in 2017 to $3,717 million in 2018, indicating a reduction in leverage or repayment of borrowings. However, from 2018 onwards, the total debt increased substantially, reaching $4,938 million in 2019 and sharply rising to $8,216 million in 2020. By the end of 2021, the total debt slightly increased further to $8,450 million. This sharp increase in debt during 2020 and 2021 might suggest increased borrowing, possibly for operational needs or strategic investments amid challenging conditions.

Total Assets

Total assets displayed a varying pattern as well. Assets declined marginally from $18,516 million in 2017 to $18,033 million in 2018. Subsequently, total assets rose notably to $21,416 million in 2019, indicating an expansion in the company’s asset base. There was a slight contraction to $18,690 million in 2020, likely reflecting asset write-downs or disposals amid the pandemic environment. By 2021, total assets increased again to $21,548 million, surpassing the previous peak, which could indicate recovery and growth.

Debt to Assets Ratio

The debt to assets ratio remained relatively stable at around 0.21 to 0.23 between 2017 and 2019, suggesting a consistent leverage level relative to asset size. However, there was a marked increase in 2020, with the ratio rising sharply to 0.44, indicating a significant increase in leverage relative to the asset base. This spike aligns with the notable rise in total debt and slight reduction in assets for that year. In 2021, the ratio decreased slightly to 0.39, reflecting a modest deleveraging or asset growth relative to debt.

Overall Insights

The data indicates that the company significantly increased its borrowing in 2020 and 2021, possibly in response to external pressures or strategic decisions during that period. Despite fluctuations, the total asset base showed resilience by returning to a higher level in 2021 after contracting in 2020. The elevated debt to assets ratio in 2020 and 2021 points to increased financial leverage, raising potential concerns regarding financial risk, although the slight improvement in 2021 suggests initial steps towards deleveraging or asset growth. Monitoring future periods will be important to assess whether this elevated leverage level persists or is reduced.

The financial data indicates several noteworthy trends regarding the company's debt and asset management over the five-year period.

Total Debt (including operating lease liability)

The total debt exhibited fluctuations with a general increasing trend. Starting at $4,249 million in 2017, it decreased to $3,717 million in 2018, suggesting some deleveraging or repayment during that year. However, it increased substantially in 2019 to $5,589 million, and then sharply rose to $8,855 million in 2020. The debt level stabilized somewhat in 2021, with a slight increase to $8,887 million. This indicates a significant rise in leverage particularly during the pandemic year 2020, which may reflect increased borrowing possibly to maintain liquidity or finance operations during a challenging period.

Total Assets

Total assets showed moderate growth overall but with variability. Assets decreased slightly from $18,516 million in 2017 to $18,033 million in 2018, then increased notably to $21,416 million in 2019. In 2020, total assets declined to $18,690 million but recovered to $21,548 million in 2021, reaching the highest level within the period. The fluctuations may reflect asset revaluation, acquisitions, or other factors impacting the asset base, but the overall increase by 2021 suggests an expansion or recovery in asset holdings.

Debt to Assets Ratio (including operating lease liability)

The debt-to-assets ratio illustrates the company's leverage relative to its asset base. This ratio decreased modestly from 0.23 in 2017 to 0.21 in 2018, indicating improved leverage conditions. However, it rose to 0.26 in 2019, followed by a substantial jump to 0.47 in 2020, nearly doubling the prior year's level. By 2021, the ratio decreased somewhat to 0.41, retaining a relatively high leverage position. This pattern aligns with the debt and asset trends, pointing to increased financial risk during 2020, with some corrective movement in 2021 but continuing elevated leverage compared to earlier years.

In summary, the company experienced a pronounced increase in debt levels starting in 2019 and peaking in 2020, coinciding with a decrease in total assets during the pandemic year. This caused a sharp rise in leverage, reflecting higher financial risk. Despite some reduction in the debt-to-asset ratio in 2021, leverage remains significantly higher than the levels reported in 2017 and 2018, indicating a sustained elevated reliance on debt financing relative to the asset base. These patterns suggest strategic financial decisions in response to external challenges and the need to balance liquidity with solvency risks.

The financial data reveals several notable trends related to the company's asset base, equity position, and leverage over the five-year period ending December 31, 2021.

Total Assets

Total assets demonstrated some fluctuations during the period under review. Initially, there was a slight decrease from $18,516 million in 2017 to $18,033 million in 2018. This was followed by a significant increase to $21,416 million in 2019. However, in 2020, total assets declined again to $18,690 million before rising to their highest point at $21,548 million in 2021. Overall, assets showed a mixed pattern but ended higher than the starting point in 2017.

Stockholders’ Equity

The equity position of the company experienced a consistent downward trend throughout the period. From $4,522 million in 2017, equity decreased steadily each year, reaching $4,104 million in 2018, $3,967 million in 2019, a marked drop to $2,532 million in 2020, and further declining to $2,057 million in 2021. This diminishing equity base suggests either accumulated losses, significant share repurchases, or other equity-reducing events over time.

Financial Leverage

Financial leverage, measured as a ratio, increased markedly from 4.09 in 2017 to 4.39 in 2018 and further to 5.4 in 2019. The increase accelerated in 2020 to 7.38 and rose substantially to 10.48 in 2021. This trend indicates the company has been increasingly relying on debt or other liabilities relative to equity to finance its assets. The sharp rise in leverage in the latter years correlates with the declining equity and fluctuating asset levels, suggesting increased financial risk.

In summary, while the company’s asset base exhibited some growth and volatility, the continual decline in stockholders’ equity paired with a significant surge in financial leverage highlights an increased dependency on debt financing and a potential rise in financial risk exposure over the analyzed period.

Earnings before interest and tax (EBIT)

There is a general increasing trend in EBIT from 2017 to 2019, rising from 598 million US dollars in 2017 to 948 million US dollars in 2019. However, a sharp decline appears in 2020, with EBIT falling to a significant negative value of -2,791 million US dollars. In 2021, EBIT improves but remains relatively low at 313 million US dollars, indicating a partial recovery but still below the earlier years' performance.

Interest expense

Interest expense remained relatively stable between 2017 and 2019, fluctuating slightly around the 170 to 190 million US dollar range. A marked increase is observed in 2020, rising to 360 million US dollars, followed by a slight decrease to 351 million US dollars in 2021. This increase corresponds with the period of negative EBIT.

Interest coverage ratio

The interest coverage ratio exhibits a declining trend from 2017 to 2021. It initially increases from 3.29 in 2017 to a peak of 5.48 in 2019, suggesting improving ability to cover interest expenses with operating earnings. However, in 2020 the ratio plunges to -7.75, reflecting negative EBIT and inability to cover interest expenses. In 2021, the ratio improves to 0.89 but remains below 1, indicating continued challenges in meeting interest obligations from operating income.

Earnings before fixed charges and tax

The earnings before fixed charges and tax demonstrated a positive and generally increasing trend from 2017 to 2019, rising from 766 million USD to 1118 million USD. However, in 2020, there was a significant downturn, with earnings falling sharply into negative territory at -2632 million USD. By 2021, a recovery is observable, with earnings returning to a positive value of 432 million USD, though still considerably below the pre-2020 levels.

Fixed charges

Fixed charges exhibited a gradual increase over the period. Starting at 350 million USD in 2017, fixed charges rose moderately to 372 million in 2018, then slightly decreased to 343 million in 2019. From 2020 onwards, fixed charges increased more substantially, reaching 614 million USD in 2020 and peaking at 826 million USD in 2021.

Fixed charge coverage ratio

The fixed charge coverage ratio, reflecting the company’s ability to meet fixed charges from earnings, showed an upward trend between 2017 and 2019, improving from 2.19 to 3.26. This indicates a strengthening position in covering fixed financial obligations during that period. In 2020, the ratio deteriorated sharply to a negative value of -4.29, corresponding to the substantial loss seen in earnings. In 2021, the coverage ratio partially recovered to 0.52, which indicates improvement but remains below the level considered safe or adequate, implying ongoing challenges in covering fixed charges from operating earnings.