Royal Caribbean Cruises Ltd (RCL)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 7.44 | 7.41 | 9.79 | 11.53 | 11.77 | 10.44 | 9.99 | 8.26 | 6.34 | 5.05 | 4.27 | 3.74 | 3.71 | 3.82 | 3.72 | 3.27 | 2.49 | 2.49 | 2.58 | 2.55 |
Royal Caribbean Group's solvency ratios demonstrate the company's ability to meet its long-term financial obligations while indicating the proportion of debt in its capital structure. The debt-to-assets ratio has remained relatively stable over the quarters, ranging from 0.61 to 0.65 in the past year, suggesting that around 61% to 65% of the company's assets are financed by debt.
The debt-to-capital ratio shows a similar trend, hovering between 0.82 and 0.88 over the same period. This ratio indicates that debt accounts for approximately 82% to 88% of Royal Caribbean Group's total capital structure.
The debt-to-equity ratio has fluctuated more significantly, ranging from 4.51 to 8.15 in the past year. This indicates that Royal Caribbean Group has been relying more on debt financing relative to equity, with debt representing around 4.51 to 8.15 times the equity in the company.
Lastly, the financial leverage ratio has also varied notably, showing a range of 7.41 to 11.77 in the last year. This ratio highlights the level of financial risk the company is exposed to, with higher ratios suggesting higher financial leverage and thus increased potential for financial distress.
Overall, while Royal Caribbean Group's solvency ratios have shown some fluctuations, the company has maintained manageable levels of debt relative to its assets, capital, and equity. However, the increasing trend in certain ratios warrants careful monitoring of the company's debt levels and financial risk management strategies.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.05 | 1.56 | 0.91 | 0.25 | -0.56 | -1.49 | -2.41 | -3.02 | -3.00 | -3.01 | -3.47 | -4.01 | -5.45 | -4.93 | -2.75 | 1.14 | 5.10 | 5.22 | 5.20 | 5.30 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates better ability to meet interest obligations.
Looking at Royal Caribbean Group's interest coverage over the last eight quarters, we observe a concerning trend. The ratio has been fluctuating, showing a significant improvement from negative values in Q4 2022 to positive values in Q4 2023. However, the ratio still remains relatively low, hovering around 1 to 2.25, indicating the company may be at risk of not generating enough operating income to cover its interest expenses.
The negative values in Q4 2022 and Q3 2022 suggest that the company's operating income was insufficient to cover its interest payments during those periods. The subsequent improvement in Q4 2023 is a positive sign, but the ratio still indicates a certain level of financial risk.
Overall, Royal Caribbean Group's interest coverage ratio has been volatile and relatively low in recent quarters, indicating that the company may face challenges in meeting its interest obligations with its current level of operating income. Investors and stakeholders should closely monitor this ratio to assess the company's financial health and ability to service its debt obligations.
See also:
Royal Caribbean Cruises Ltd Solvency Ratios (Quarterly Data)