Booking Holdings Inc (BKNG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.50 | 0.47 | 0.38 | 0.50 | 0.36 |
| Debt-to-capital ratio | 1.29 | 0.81 | 0.59 | 0.69 | 0.56 |
| Debt-to-equity ratio | — | 4.31 | 1.45 | 2.25 | 1.29 |
| Financial leverage ratio | — | 9.12 | 3.83 | 4.47 | 3.61 |
The solvency ratios of Booking Holdings Inc over the past five years indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has shown an increasing trend from 0.40 in 2019 to 0.58 in 2023, suggesting that Booking Holdings has been relying more on debt to finance its assets. This could potentially increase the company's financial risk as a higher debt-to-assets ratio indicates a greater proportion of assets funded by debt.
The debt-to-capital ratio has also exhibited an upward trend, reaching 1.24 in 2023 from 0.59 in 2019. This implies that a significant portion of Booking Holdings' capital structure is composed of debt, which may increase the company's dependence on debt financing and result in higher interest expenses.
The debt-to-equity ratio has fluctuated over the years, with a peak of 4.49 in 2022 and a varying trend thereafter. This ratio indicates the extent to which Booking Holdings is financed by debt versus equity. A high debt-to-equity ratio can signify higher financial leverage and potential financial risk for the company.
The financial leverage ratio, which was non-existent in 2019, has shown a steady increase since then, reaching 9.12 in 2022. This ratio highlights the company's reliance on debt to finance its operations and investments. A higher financial leverage ratio implies a higher level of debt relative to equity, which can magnify both returns and risks for investors.
Overall, the solvency ratios of Booking Holdings Inc suggest a varying level of reliance on debt for financing its operations and investments over the years. Investors and stakeholders may need to monitor these ratios closely to assess the company's financial health and risk profile accurately.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.51 | 13.05 | 7.47 | -1.77 | 20.09 |
Booking Holdings Inc's interest coverage has shown fluctuations over the past five years. In 2023, the interest coverage ratio stands at 6.51, indicating the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT) has decreased compared to the previous year. Despite this decrease, the ratio remains above 1, suggesting that the company's earnings are still sufficient to cover its interest expenses.
The significant decrease in the interest coverage ratio from 46.89 in 2019 to 1.92 in 2020 is a cause for concern, indicating potential financial stress or increased interest expenses compared to earnings. However, the company managed to improve its interest coverage in the following years, reaching 12.54 in 2022 and 7.51 in 2021, which were relatively strong levels.
Overall, while the recent decrease in interest coverage raises some concerns, the company has shown the ability to cover its interest expenses in the past. Investors and creditors may monitor the trend in the interest coverage ratio to assess Booking Holdings Inc's financial health and ability to meet its debt obligations.