Expedia Group Inc. (EXPE)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.29 | 0.29 | 0.36 | 0.44 |
| Debt-to-capital ratio | 0.77 | 0.80 | 0.73 | 0.79 | 0.84 |
| Debt-to-equity ratio | 3.35 | 4.08 | 2.73 | 3.75 | 5.44 |
| Financial leverage ratio | 14.38 | 14.11 | 9.44 | 10.48 | 12.38 |
Expedia Group Inc.'s solvency ratios indicate the company's ability to meet its long-term financial obligations and the extent of its leverage.
1. Debt-to-assets ratio has shown a decreasing trend from 0.44 in 2020 to 0.23 in 2024, suggesting that the company has reduced its reliance on debt to finance its assets over the years.
2. Debt-to-capital ratio also exhibits a declining pattern, decreasing from 0.84 in 2020 to 0.77 in 2024, indicating a lower proportion of debt in the company's capital structure.
3. Debt-to-equity ratio has fluctuated over the period, ranging from 2.73 to 5.44. Although there have been fluctuations, the ratio has generally decreased, indicating a decreasing reliance on debt relative to equity.
4. Financial leverage ratio, which measures the proportion of assets that are financed by debt, shows an increase from 9.44 in 2022 to 14.38 in 2024. This suggests that the company has become more leveraged in recent years.
In conclusion, Expedia Group Inc. has shown improvements in its debt management based on the decreasing trends in debt-related ratios, such as debt-to-assets and debt-to-capital ratios. However, the increasing financial leverage ratio in the later years raises concerns about the company's higher dependence on debt for financing its operations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.36 | 5.60 | 2.97 | 0.88 | -7.43 |
The interest coverage ratio for Expedia Group Inc. has shown significant fluctuations over the years. It was negative at -7.43 as of December 31, 2020, indicating that the company's operating income was insufficient to cover its interest expenses. However, there has been improvement in this ratio over the subsequent years. As of December 31, 2021, the interest coverage ratio improved to 0.88, but it was still below 1, suggesting a potential risk in meeting interest obligations.
By December 31, 2022, the interest coverage ratio increased to 2.97, showing a healthier ability to cover interest expenses with operating income. This positive trend continued into the following years, reaching 5.60 as of December 31, 2023, and slightly declining to 5.36 by December 31, 2024.
Overall, the improving trend of Expedia Group Inc.'s interest coverage ratio from negative levels to positive values indicates enhanced capability to meet its interest payments using its operating profits. However, continued monitoring of this ratio is advised to ensure the company's financial health and sustainability over the long term.