Royal Caribbean Cruises Ltd (RCL)
Solvency ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | 4.90 | 5.26 | 6.15 | 6.83 | 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 |
The solvency ratios of Royal Caribbean Cruises Ltd show a consistent and favorable trend over the reported periods. The debt-to-assets ratio remained at 0.00 throughout, indicating that the company's total debt was negligible relative to its total assets, reflecting a strong financial position in terms of asset coverage by debt.
Similarly, the debt-to-capital ratio and debt-to-equity ratio also stayed at 0.00 consistently, highlighting the company's ability to finance its operations predominantly through equity rather than debt. This indicates a low level of financial risk associated with leverage and a healthy balance between debt and equity financing.
The financial leverage ratio, which measures the company's reliance on debt financing, had a fluctuating trend over the periods. The ratio increased from 3.27 in March 2020 to a peak of 11.77 in December 2022 before gradually decreasing to 4.90 by December 2024. This fluctuation suggests that the company initially increased its debt levels, possibly for expansion or investment purposes, before actively deleveraging and reducing its financial leverage over time.
Overall, the solvency ratios indicate that Royal Caribbean Cruises Ltd has maintained a strong financial position with a low level of debt relative to its assets and capital. The company's ability to manage its leverage effectively and reduce dependence on debt financing demonstrates prudent financial management practices.
Coverage ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.60 | 2.45 | 2.65 | 2.32 | 2.08 | 1.49 | 0.84 | 0.17 | -0.65 | -1.50 | -2.38 | -2.94 | -2.90 | -2.75 | -3.13 | -3.64 | -3.73 | -3.04 | -0.45 | 3.83 |
The interest coverage ratio for Royal Caribbean Cruises Ltd experienced a significant decline from negative figures in the second half of 2020 through the first half of 2022. This negative trend indicates that the company's operating income was insufficient to cover its interest expenses during that period, raising concerns about its ability to meet debt obligations.
However, starting from the first quarter of 2023, the interest coverage ratio began to show improvement, gradually moving into positive territory. This positive shift suggests that Royal Caribbean Cruises Ltd's operating income became more capable of covering its interest expenses, implying a stronger financial position and reduced financial risk.
By the end of 2024, the interest coverage ratio stabilized at around 2.60, indicating that the company's earnings were more than twice its interest expenses. This positive development is a favorable sign of Royal Caribbean Cruises Ltd's improved ability to honor its debt commitments and its enhanced financial stability compared to the earlier turbulent period.
Overall, the interest coverage ratio analysis reflects a resilience and recovery in Royal Caribbean Cruises Ltd's financial performance over the analyzed period, signaling an improvement in its financial health and debt repayment capabilities.
See also:
Royal Caribbean Cruises Ltd Solvency Ratios (Quarterly Data)