Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Income Statement
- Statement of Comprehensive Income
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
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Solvency Ratios (Summary)
Royal Caribbean Cruises Ltd., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
The analysis of the quarterly financial ratios reveals notable trends in the company's leverage and ability to cover interest expenses over the given periods.
- Debt to Equity
- The debt to equity ratio displayed a generally moderate and stable profile from March 2017 through December 2019, fluctuating within a range near 0.7 to 1.0. Beginning in the first quarter of 2020, there was a significant and steady increase, reaching 6.83 by June 2022. This indicates a marked increase in financial leverage and reliance on debt financing relative to shareholders' equity in recent quarters.
- Debt to Equity (Including Operating Lease Liability)
- Including operating lease liabilities, the debt to equity ratio followed a similar pattern as the standard measure but at slightly higher values. Stability prevailed through 2019, followed by a pronounced rise starting in early 2020, increasing from approximately 1.6 to over 7.0 by mid-2022, reinforcing the observation of escalating leverage.
- Debt to Capital
- The company's debt to capital ratio stayed relatively steady near 0.4 to 0.5 before 2020, then rose sharply from about 0.6 in early 2020 to 0.87 by mid-2022. This growth signals a larger proportion of debt in the overall capital structure over time.
- Debt to Capital (Including Operating Lease Liability)
- Including operating lease liabilities, this ratio showed almost identical trends with slightly elevated values, moving upwards from the low 0.6s in early 2020 to 0.88 by mid-2022.
- Debt to Assets
- The debt to assets ratio was consistent around 0.34 to 0.39 through 2019 but experienced a considerable rise commencing in 2020, climbing to approximately 0.68 by mid-2022. The increase suggests growing debt obligations compared to total assets.
- Debt to Assets (Including Operating Lease Liability)
- When operating lease liabilities are considered, the debt to assets ratio showed a comparable upward trend from about 0.5 in early 2020 to 0.7 by mid-2022, underscoring the increased leverage when lease obligations are accounted for.
- Financial Leverage
- Financial leverage rose moderately from 2.08 at the end of 2017 to around 2.5 by the end of 2019, followed by a significant increase starting 2020, reaching nearly 10.0 by June 2022. This pattern indicates a substantial increase in the use of debt relative to equity, implying higher financial risk.
- Interest Coverage
- Interest coverage ratios were relatively healthy before 2020, fluctuating around 5.7 to 6.9, reflecting the ability to comfortably meet interest expenses. Beginning in the first quarter of 2020, the coverage dropped sharply into negative territory, declining to approximately -2.45 by mid-2022. This negative coverage suggests persistent operating losses or insufficient earnings to cover interest expenses, highlighting deteriorated financial health and increased risk of solvency issues during and after the onset of the 2020 period.
Overall, the financial ratios demonstrate a stable and manageable leverage profile until the end of 2019, followed by a marked deterioration starting in early 2020. The significant increases in debt-related ratios coupled with a plunge in interest coverage highlight a period of heightened financial stress and reliance on debt financing. These trends may reflect adverse operational impacts and increased financial risk for the company in the aftermath of early 2020 events.
Debt Ratios
Coverage Ratios
Debt to Equity
Royal Caribbean Cruises Ltd., debt to equity calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
Analysis of the financial data reveals notable trends and shifts in the company’s capital structure between March 2017 and June 2022.
- Total Debt
- Over the observed periods, total debt demonstrates an overall increasing trajectory, rising from approximately 8.57 billion US dollars in March 2017 to about 23.21 billion US dollars in June 2022. While there are some fluctuations within individual quarters—for example, a slight decrease from March 2017 to December 2017—the general direction is upward, with a particularly marked acceleration in the debt levels starting from March 2020.
- Shareholders’ Equity
- Shareholders’ equity initially exhibits moderate growth, increasing from roughly 9.27 billion US dollars in March 2017 to a peak of approximately 12.16 billion US dollars by December 2019. However, from March 2020 onwards, equity shows a sustained decline, dropping to around 3.40 billion US dollars by June 2022. This downward trend suggests a significant erosion of equity capital during this interval.
- Debt to Equity Ratio
- The debt to equity ratio mirrors the amplified leverage and changes in capital composition. It remained below 1.0 from March 2017 through December 2019, fluctuating between 0.70 and 0.97, indicative of relatively balanced leverage. Starting in March 2020, the ratio increases sharply, climbing from 1.57 and reaching as high as 6.83 by June 2022. This sharp rise reflects the combination of growing debt and declining equity, indicating a substantial increase in financial leverage and potentially heightened financial risk.
In summary, the data illustrates a significant shift towards increased leverage over the period. The marked rise in total debt alongside the contraction of shareholders’ equity post-2020 suggests that the company has been relying more heavily on debt financing. The elevated debt to equity ratio underscores this transition, highlighting a change in capital structure that could have implications for financial stability and risk profile.
Debt to Equity (including Operating Lease Liability)
Royal Caribbean Cruises Ltd., debt to equity (including operating lease liability) calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Current portion of operating lease liabilities | |||||||||||||||||||||||||||||
| Long-term operating lease liabilities | |||||||||||||||||||||||||||||
| Total debt (including operating lease liability) | |||||||||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- Over the observed period from March 2017 to June 2022, total debt exhibited a general upward trend with fluctuations. Initially, debt decreased gradually from approximately 8.57 billion to 7.54 billion US dollars between March 2017 and December 2017 but began to rise again starting early 2018, reaching a peak of about 11.73 billion at the end of 2019. From March 2020 onwards, there was a sharp increase in the total debt, growing rapidly to 23.85 billion US dollars by June 2022. This significant rise coincides with the period impacted by global economic disruptions, suggesting increased borrowing or financial obligations during this timeframe.
- Shareholders’ Equity
- Shareholders’ equity demonstrated growth initially, increasing from around 9.27 billion US dollars in March 2017 to a peak near 12.16 billion at the end of 2019. However, from March 2020, equity declined markedly and consistently, reaching approximately 3.4 billion US dollars by June 2022. This substantial reduction indicates a deterioration in net assets, possibly reflecting accumulated losses or other negative impacts on the company's financial position during this later period.
- Debt to Equity Ratio (including operating lease liability)
- The debt-to-equity ratio remained below or near 1 from March 2017 to December 2019, indicating a relatively balanced capital structure with debt levels comparable to equity. Starting in March 2020, the ratio increased dramatically, surging from 1.63 to 7.02 by June 2022. This steep rise reflects the combined effects of rising debt and shrinking equity, resulting in a significantly leveraged financial position. The increasing leverage ratio highlights heightened financial risk and potential challenges in meeting debt obligations.
- Overall Trends and Insights
- The data reveals a transition from a stable financial structure with moderate leverage prior to 2020 to a much riskier financial posture after the onset of 2020. The marked increase in total debt alongside a sharp decline in equity suggests financial strain, possibly driven by external shocks or operational pressures. The elevated debt levels relative to equity imply increased vulnerability to financial distress. These trends indicate the importance of monitoring debt management and capital adequacy closely in subsequent periods to address potential solvency concerns.
Debt to Capital
Royal Caribbean Cruises Ltd., debt to capital calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals a clear upward trajectory in the company's total debt over the examined periods. Starting from approximately $8.57 billion in the first quarter of 2017, total debt experienced some fluctuations but generally increased, peaking around $23.21 billion by the second quarter of 2022. Notably, a significant rise is observed from early 2020 onwards, which may suggest increased borrowing or financing activities during that timeframe.
Total capital mirrored a similar upward trend but with less volatility. Beginning at approximately $17.84 billion in early 2017, total capital steadily increased to reach around $26.61 billion by mid-2022. Although there were minor declines in certain quarters, total capital's overall progression was positive, reflecting potential asset growth or equity increases alongside debt increments.
The debt-to-capital ratio demonstrates a significant and consistent increase over the studied periods. Initially, in the first quarter of 2017, the ratio stood at 0.48, indicating that nearly half of the capital structure was debt-financed. Following a slight decline through 2017 to 2018, the ratio began an upward trend from 2019 onwards, accelerating sharply throughout 2020 and continuing to rise up to 0.87 by the second quarter of 2022. This signifies an increasing reliance on debt relative to total capital, suggesting a shift toward greater financial leverage.
- Total Debt
- Displayed progressive growth from about 8.57 billion USD to over 23 billion USD across the period, with accelerated borrowing after early 2020.
- Total Capital
- Showed an overall increase from roughly 17.8 billion USD to approximately 26.6 billion USD, indicating expansion in the company’s capital base.
- Debt to Capital Ratio
- Rose from 0.48 to 0.87, highlighting a substantial increase in debt proportion within the capital structure, especially pronounced starting from 2020.
In summary, the company has substantially increased its leverage over the examined timeframe, principally after the onset of 2020. While total capital growth supports expansion, the sharp rise in debt and the debt-to-capital ratio suggest heightened financial risk and greater dependence on external financing. Monitoring this leveraged position will be essential for assessing future financial stability and the company’s capacity to manage its obligations.
Debt to Capital (including Operating Lease Liability)
Royal Caribbean Cruises Ltd., debt to capital (including operating lease liability) calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Current portion of operating lease liabilities | |||||||||||||||||||||||||||||
| Long-term operating lease liabilities | |||||||||||||||||||||||||||||
| Total debt (including operating lease liability) | |||||||||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||||||||
| Total capital (including operating lease liability) | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data reveals several significant trends related to the company's debt levels and capital structure over the reported periods.
- Total Debt (including operating lease liability)
- The total debt exhibited a cyclical but overall increasing trend across the quarters. Initially, there was a gradual decline from approximately 8.57 billion USD at the end of March 2017 to about 7.54 billion USD by December 2017. Following this period, debt levels increased steadily, peaking at over 11.78 billion USD towards the end of 2019. A marked and sharp increase occurred starting in the first quarter of 2020, coinciding with significant external challenges likely impacting operations. Debt escalated substantially to nearly 20 billion USD by the end of 2020 and continued a modest upward trajectory into mid-2022, reaching approximately 23.85 billion USD.
- Total Capital (including operating lease liability)
- Total capital also followed an upward trajectory with some fluctuations. Beginning at approximately 17.84 billion USD in March 2017, capital expanded steadily to over 23.9 billion USD by the end of 2019. From 2020 onwards, total capital increased sharply in response to increased debt and presumably other capital adjustments, hitting a pinnacle of about 30.75 billion USD in early 2021. However, after this peak, total capital diminished gradually through the remainder of 2021 and into mid-2022, stabilizing around 27.24 billion USD.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio demonstrates a notable increase throughout the timeframe, reflecting a growing reliance on debt financing relative to total capital. Initially, the ratio decreased from 0.48 in March 2017 to a low of 0.41 by December 2017, indicating a period of deleveraging or increased equity/decreased debt balance. Beginning in 2018, there was a steady incline in the ratio, rising consistently each quarter and accelerating from the start of 2020. By March 2020, the ratio was 0.62 and continued climbing sharply to reach 0.88 by mid-2022. This trend signifies a shift toward higher financial leverage, with debt comprising an increasing portion of the company's capital structure.
In summary, the analysis points to increasing debt levels, particularly from early 2020 onwards, which have driven up the total capital and substantially raised the debt to capital ratio. This trend suggests greater financial leverage and potentially heightened risk, likely in response to strategic decisions or market conditions that required significant capital infusion.
Debt to Assets
Royal Caribbean Cruises Ltd., debt to assets calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
-
Total debt exhibited a general upward trend over the analyzed periods from March 31, 2017, through June 30, 2022. Initial values ranged around 8.57 billion US dollars and showed moderate fluctuations until the end of 2019. Beginning March 31, 2020, a pronounced increase occurred, pushing total debt from approximately 16.03 billion US dollars to over 23 billion by mid-2022. This marked rise suggests significant borrowing activity or debt issuance starting in early 2020, likely reflecting strategic financial adjustments or responses to external factors.
- Total Assets
-
Total assets demonstrated steady growth throughout the periods, increasing from roughly 22.0 billion US dollars in early 2017 to exceed 33.9 billion by mid-2022. While certain quarterly periods displayed minor fluctuations, the overall asset base expanded consistently. This growth in total assets, combined with the rising total debt figures, indicates ongoing investment or asset acquisitions supporting company operations or expansion initiatives.
- Debt to Assets Ratio
-
The debt to assets ratio remained relatively stable and moderately low from 2017 through 2019, fluctuating approximately between 0.34 and 0.39. Starting in the first quarter of 2020, the ratio increased sharply, rising from 0.48 to nearly 0.68 by mid-2022. This escalation indicates a growing reliance on debt financing relative to the company’s asset base. The ratio trend suggests that debt has been increasing at a faster pace than assets since early 2020, corresponding with the notable growth in total debt observed during the same period.
Debt to Assets (including Operating Lease Liability)
Royal Caribbean Cruises Ltd., debt to assets (including operating lease liability) calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||||||||
| Current portion of operating lease liabilities | |||||||||||||||||||||||||||||
| Long-term operating lease liabilities | |||||||||||||||||||||||||||||
| Total debt (including operating lease liability) | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals distinct trends in both the leverage and asset base over the analyzed periods. There is a noticeable upward trajectory in the total debt levels, which exhibit a steady increase from March 2017 through June 2022. This upward movement reflects a growth in liabilities that outpaces the growth in assets over the same timeframe.
Total assets show a general increase across the quarters, indicating continued investments or acquisitions that have expanded the asset base. While assets have grown, their growth rate appears more moderate relative to total debt, especially post-2019.
- Total Debt (including operating lease liability)
- The total debt increased gradually from approximately 8.57 billion US dollars in March 2017 to over 23.85 billion US dollars by June 2022. The most significant rise occurs starting in early 2020, suggesting increased borrowing or lease obligations during this period.
- Total Assets
- The total assets reflect consistent expansion, moving from about 22.02 billion US dollars in March 2017 to around 33.94 billion US dollars in June 2022. However, the asset growth in magnitude is less dramatic compared to debt growth, especially noticeable from 2020 onward.
- Debt to Assets Ratio
- This ratio illustrates an increasing leverage trend, beginning at 0.39 in the first quarter of 2017, dipping slightly during mid-2017 to early 2018, and then steadily rising from 0.50 in March 2020 to 0.70 by June 2022. This upward trend signifies that debt is growing faster relative to assets, resulting in higher financial leverage and potential increased risk exposure.
Overall, the company appears to have significantly increased its debt load over the analyzed period, particularly from 2020 onward, which has resulted in a higher debt-to-asset ratio. The asset base grew but at a slower pace, causing leverage ratios to elevate. This dynamic suggests a strategic reliance on borrowed funds or lease obligations, which could impact financial flexibility and risk profile going forward.
Financial Leverage
Royal Caribbean Cruises Ltd., financial leverage calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- The total assets exhibit a generally upward trend from March 31, 2017 to June 30, 2022. Starting at approximately 22 billion US dollars in early 2017, the assets steadily increase each quarter, reaching around 27.7 billion by the end of 2018 and continuing to rise to a peak just over 33.9 billion by mid-2022. Minor fluctuations occur, particularly in 2020 and 2021, but the overall trajectory remains positive, reflecting ongoing growth or accumulation of resources during the period.
- Shareholders’ Equity
- Shareholders' equity shows a different pattern compared to total assets. From early 2017 through the end of 2019, equity generally increased from approximately 9.3 billion to about 12.2 billion US dollars, indicating strengthening capital positions. However, beginning in early 2020, equity experiences a marked decline, dropping sharply to below 9 billion by mid-2020 and continuing this downward path to approximately 3.4 billion by mid-2022. This significant decrease suggests substantial losses, capital reductions, or other factors negatively impacting net equity during this time frame.
- Financial Leverage
- Financial leverage exhibits a rising trend over the analyzed period. Initially, from early 2017 through 2019, leverage ratios remain relatively stable between approximately 2.1 and 2.6, indicating moderate use of debt relative to equity. From 2020 onwards, leverage ratios climb substantially, increasing from around 3.3 in March 2020 to nearly 10 by mid-2022. This sharp increase is consistent with the decline in shareholders' equity and an increase in total liabilities relative to equity, implying that the company has taken on considerably more debt or financial obligations compared to its equity base in recent years.
- Overall Insights
- The combination of increasing total assets alongside declining shareholders' equity has led to a pronounced escalation in financial leverage. This implies a shift towards a higher debt burden relative to equity, which may intensify financial risk. The decline in equity and rising leverage beginning in 2020 coincides with observed economic disruptions in that period, potentially indicating challenges affecting profitability or capital structure. The trends suggest that while the company's asset base grew, it financed such growth increasingly through debt, resulting in reduced equity cushion over time.
Interest Coverage
Royal Caribbean Cruises Ltd., interest coverage calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | ||||||||
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| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Net income (loss) attributable to Royal Caribbean Cruises Ltd. | |||||||||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | |||||||||||||||||||||||||||||
| Add: Income tax expense | |||||||||||||||||||||||||||||
| Add: Interest expense, net of interest capitalized | |||||||||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | |||||||||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||||||||
| Interest coverage1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31).
1 Q2 2022 Calculation
Interest coverage
= (EBITQ2 2022
+ EBITQ1 2022
+ EBITQ4 2021
+ EBITQ3 2021)
÷ (Interest expenseQ2 2022
+ Interest expenseQ1 2022
+ Interest expenseQ4 2021
+ Interest expenseQ3 2021)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends and patterns over the examined periods.
- Earnings Before Interest and Tax (EBIT)
- EBIT exhibited fluctuating performance with notable peaks and troughs. From early 2017 through the end of 2019, EBIT generally showed strong positive values with quarterly peaks reaching close to or exceeding 900 million US dollars (e.g., Sep 30, 2018 and Sep 30, 2019). However, beginning in early 2020, EBIT sharply declined into significant negative territory, with the lowest point observed in March 31, 2020 (-1,344,124 thousand US$). This downward trend persisted throughout 2020 and into 2021 and 2022, although the magnitude of losses slightly moderated but remained substantially negative, indicating ongoing operational challenges during this latter period.
- Interest Expense, Net of Interest Capitalized
- Interest expense remained relatively stable from 2017 through 2019, fluctuating between approximately 67,878 and 111,304 thousand US dollars per quarter. However, starting in early 2020, interest expense increased markedly, peaking around 273,089 to 430,661 thousand US dollars in 2020 and the first half of 2021 before slightly decreasing but still remaining elevated relative to prior years. This rise in interest expense corresponds with the period of declining EBIT, suggesting increased borrowing costs or additional financing undertaken during financial stress.
- Interest Coverage Ratio
- The interest coverage ratio mirrored the trends in EBIT and interest expense. In 2017 through 2019, the ratio maintained healthy levels generally above 5, indicating the company’s strong ability to meet interest obligations from operating earnings. With the onset of 2020, the ratio sharply deteriorated to values below 2, and then transitioned into negative territory, reaching as low as -5.84 in Dec 31, 2020. This negative ratio indicates that EBIT was insufficient to cover interest costs, implying financial strain. Although the ratio slightly improved in 2021 and 2022, it remained negative, suggesting continued challenges in meeting interest obligations from operational profits.
Overall, the company's operational earnings were solid and stable prior to 2020 but faced a significant and sustained downturn beginning in early 2020, coinciding with increased interest expenses and declining coverage ratios. These trends likely signal adverse external or internal conditions impacting profitability and financial health during this period.