Colby Bates 2/16/2021
Financial Ratios for RCL
Morningstar reports the following ratio findings based of the years of 2019,2018,2017. Probability ratio:
return on assets % (6.48,7.25,7.29) and return on equity % (16.15,16.61,16.40); liquidity ratio: current
ratio (0.15,0.17,0.17) and quick ratio (0.07,0.09,0.09); Efficiency ratio: days sales outstanding
(10.50,12.36,12.69) and payable period (31.66,29.42,24.80); Growth ratio: Revenue % (15.34,8.16,3.31)
and Operating Income % (9.92,8.64,17.39); Cash flow: Free Cash Flow/ Sales % (6.32,1.91,26.32) and
Free Cash Flow/Net Income (0.37, -0.10,1.42). (Morningstar, 2020)
Although Carnival is the larger of the two cruise lines, Royal Caribbean has emerged as a more
profitable company. These measurements are based on such factors as free cash flow (which
accounts for the removal of depreciation of ships), operating margin and return on capital. With
the calculations of these measurements, the smaller Royal has generated better returns than
Carnival, its larger competitor.
Comps for RCL and Carnival (2019)
RCL
Carnival
Return on assets %
6.48
6.84
Return on equity %
16.15
12.01
Current ratio
0.15
0.23
Quick Ratio
0.07
0.11
Revenue %
15.34
10.30
Operating Income %
9.92
-1.47
Free Cash Flow/Sales %
6.32
0.22
Free Cash Flow/Net Income
0.37
0.02
Profitability
Liquidity
Growth
Cash Flow
Efficiency Ratio
Days sales outstanding
10.50
7.03
Payable period
31.66
21.01
Morningstar. (2020). Village Roadshow Limited. DatAnalysis Premium. Retrieved February 28, 2020,
from https://datanalysis.morningstar.com.au