Royal Caribbean Cruises Ltd (RCL)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	2,878,000	-766,000	-3,870,330	-4,601,560	2,082,700
Total assets	US$ in thousands	35,131,000	33,776,000	32,258,400	32,465,200	30,320,300
Operating ROA		8.19%	-2.27%	-12.00%	-14.17%	6.87%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $2,878,000K ÷ $35,131,000K
= 8.19%

The operating return on assets (operating ROA) of Royal Caribbean Group has shown significant fluctuations over the past five years. In 2023, the operating ROA improved to 8.19%, indicating that the company generated $0.0819 in operating income for every dollar of assets. This is a positive sign of efficiency in utilizing its assets to generate operating profits.

However, in 2022, the operating ROA was negative at -2.26%, suggesting that the company experienced operating losses relative to its asset base. This could be a concerning indication of operational inefficiencies or financial challenges during that year.

The situation was more severe in 2021 and 2020, where the operating ROA was -11.74% and -9.35% respectively. These years were particularly challenging for the company as it struggled to generate operating income from its assets, possibly due to external factors such as the COVID-19 pandemic impacting the cruise industry.

On a more positive note, in 2019, the operating ROA was 6.87%, demonstrating a strong operational performance relative to its asset base. This indicates that the company effectively utilized its assets to generate operating profits, reflecting solid operational efficiency.

In conclusion, while Royal Caribbean Group has experienced fluctuations in its operating ROA over the past five years, the recent improvement in 2023 is a positive sign of operational efficiency. It will be important for the company to continue focusing on effectively utilizing its assets to generate sustainable operating profits in the future.