Royal Caribbean Cruises Ltd (RCL)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	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
Cost of revenue (ttm)	US$ in thousands	9,398,000	9,589,000	9,334,860	8,767,740	8,127,640	7,667,080	7,486,480	7,222,460	6,614,330	5,967,390	4,824,821	3,558,791	2,657,508	1,787,265	1,282,183	1,537,773	2,765,106	3,981,369	5,295,800	6,159,880
Inventory	US$ in thousands	265,000	265,000	242,000	236,000	248,000	241,522	215,915	221,299	224,016	237,186	229,108	179,466	150,224	142,408	132,888	119,405	118,703	142,432	152,596	177,705
Inventory turnover		35.46	36.18	38.57	37.15	32.77	31.74	34.67	32.64	29.53	25.16	21.06	19.83	17.69	12.55	9.65	12.88	23.29	27.95	34.70	34.66

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $9,398,000K ÷ $265,000K
= 35.46

Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory. It indicates the number of times a company sells and replaces its inventory during a specific period. For Royal Caribbean Cruises Ltd, the inventory turnover has been fluctuating over the years.

From March 31, 2020, until December 31, 2020, the inventory turnover ratio declined steadily from 34.66 to 23.29, indicating a decrease in the efficiency of inventory management. However, starting from March 31, 2021, the ratio dropped significantly to 12.88 and continued to decrease until June 30, 2021, reaching 9.65, which may suggest potential issues with inventory control or sales sluggishness during that period.

Subsequently, there was a gradual improvement in inventory turnover from September 30, 2021, to June 30, 2022, as the ratio increased to 25.16. This indicates that the company managed its inventory more efficiently during this period, possibly due to better demand forecasting or inventory optimization strategies. However, the ratio fluctuated slightly in the following quarters but remained relatively stable above 30, suggesting improved inventory management effectiveness.

By December 31, 2024, the inventory turnover ratio stood at 35.46, reflecting an increase in inventory turnover efficiency compared to previous years. This could be a positive indicator of Royal Caribbean Cruises Ltd's ability to effectively manage and sell its inventory to meet customer demand.

Overall, while there have been fluctuations in Royal Caribbean Cruises Ltd's inventory turnover ratio over the years, the company seems to have made improvements in managing its inventory efficiently, as evidenced by the increasing trend in recent periods. This may lead to better liquidity, reduced holding costs, and improved profitability for the company.