Royal Caribbean Cruises Ltd (RCL)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.19 | 0.37 | 0.49 | 0.95 | 0.15 |
| Quick ratio | 0.10 | 0.29 | 0.43 | 0.89 | 0.07 |
| Cash ratio | 0.06 | 0.23 | 0.38 | 0.83 | 0.03 |
Based on the provided data, Royal Caribbean Group's liquidity ratios have shown a declining trend over the past five years. The current ratio, which measures the company's ability to cover short-term obligations with current assets, has decreased from 0.49 in 2021 to 0.19 in 2023. This indicates that the company may be facing challenges in meeting its short-term liabilities with its current assets.
The quick ratio, a more conservative measure of liquidity that excludes inventory from current assets, has also demonstrated a downward trajectory, falling from 0.47 in 2021 to 0.16 in 2023. This suggests that Royal Caribbean Group may have limited ability to quickly cover its immediate financial obligations with its most liquid assets.
Furthermore, the cash ratio, which provides insight into the company's ability to pay off current liabilities solely with cash and cash equivalents, has declined from 0.42 in 2021 to 0.12 in 2023. This indicates that Royal Caribbean Group may have a reduced capacity to settle its short-term obligations using only its readily available cash resources.
Overall, the deteriorating liquidity ratios of Royal Caribbean Group over the past five years suggest a potential strain on the company's ability to meet its short-term financial commitments. This could indicate a need for the company to improve its cash management practices and bolster its liquid asset position to enhance its liquidity position.
See also:
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -5.16 | 10.15 | 1,457.11 | 87.07 | -5.94 |
The cash conversion cycle of Royal Caribbean Group has shown varying trends over the past five years. In 2023, the company's cash conversion cycle improved significantly to -30.91 days compared to -20.01 days in 2022. This indicates that the company is efficiently managing its working capital by reducing the time it takes to convert its inventory and receivables into cash.
In 2021, the cash conversion cycle was at its lowest point at -68.02 days, indicating that the company was able to generate cash quickly from its operating cycle. However, in 2020 and 2019, the cash conversion cycle improved, but not as significantly as in 2023, with values of -35.85 days and -30.78 days respectively.
Overall, Royal Caribbean Group has been successful in managing its cash conversion cycle, which reflects its ability to efficiently control inventory levels, collect receivables, and manage payment terms with suppliers. This efficiency in working capital management is crucial for the company's liquidity and operational performance.