Royal Caribbean Cruises Ltd (RCL)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	11,586,000	9,594,300	5,364,290	6,642,820	8,879,960
Inventory	US$ in thousands	248,000	224,000	150,224	118,703	162,107
Inventory turnover		46.72	42.83	35.71	55.96	54.78

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $11,586,000K ÷ $248,000K
= 46.72

The inventory turnover ratio for Royal Caribbean Group has shown fluctuations over the past five years. In 2023, the inventory turnover ratio was 19.27, indicating that the company sold and replaced its inventory approximately 19.27 times during the year. This represents a significant improvement from the previous year, where the ratio was 16.42.

The sharp increase in inventory turnover from 2021 to 2023 suggests that Royal Caribbean Group has been more efficient in managing its inventory levels and converting it into sales. However, the ratio was relatively low in 2021 compared to the other years, indicating potential challenges in inventory management or sales performance during that period.

Overall, the upward trend in inventory turnover since 2021 is a positive sign of improved efficiency in inventory management and sales operations for Royal Caribbean Group. High inventory turnover ratios generally indicate that the company is effectively managing its inventory levels to meet customer demand and avoid excess stock, which can ultimately lead to improved profitability and cash flow.