Royal Caribbean Cruises Ltd (RCL)

Return on assets (ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	1,697,000	-2,156,000	-5,260,500	-5,797,460	1,878,890
Total assets	US$ in thousands	35,131,000	33,776,000	32,258,400	32,465,200	30,320,300
ROA		4.83%	-6.38%	-16.31%	-17.86%	6.20%

December 31, 2023 calculation

ROA = Net income ÷ Total assets
= $1,697,000K ÷ $35,131,000K
= 4.83%

The return on assets (ROA) of Royal Caribbean Group has shown significant fluctuations over the past five years. In 2019, the ROA was relatively strong at 6.20%, indicating that the company generated a healthy return on its total assets. However, this positive trend reversed in the following years, as the ROA turned negative in 2020, 2021, and 2022, reaching the lowest point of -17.86% in 2020.

The negative ROA figures in 2020, 2021, and 2022 suggest that the company's net income was insufficient to cover the total asset base, reflecting financial challenges during those years. It is important to note that a negative ROA indicates that the company is not generating profits from its assets.

The ROA improved significantly in 2023, reaching 4.83%, indicating a positive turnaround in the company's performance in utilizing its assets to generate earnings. This improvement in ROA may suggest that Royal Caribbean Group implemented effective strategies to enhance asset utilization and profitability during the year.

Overall, the fluctuating ROA trends of Royal Caribbean Group over the past five years highlight the company's financial performance volatility and the importance of closely monitoring its asset management strategies to ensure sustainable profitability in the future.