Royal Carribean Ratio Analysis

Royal Caribbean Cruises Ltd

Royal Caribbean Cruises Ltd. is the world’s second largest cruise company, operating the Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de France brands, with 40 ships and a passenger capacity of approximately 92,300 and TUI Cruises through a 50% joint venture. The company will introduce two more ships by the end of 2012, when it will have a total capacity of approximately 98,000 berths. The ships operate worldwide with a selection of itineraries that call on approximately 400 destinations. The financial position of the company can be explained as below:

Financial Strength Ratios

|Ratios |2011 |2010 |2009 |Industry |Carnival |

| | | | |Average |Cruises |

| | | | | | |

|Current Ratio |0.39 |0.27 |0.37 |0.80 |.20 |

| Quick/ Acid Test Ratio |0.12 |0.1 |0.15 |0.36 |.1 |

|Long Term Debt to Equity |0.96 |0.75 |0.95 |1.42  |0.34 |

|Interest Coverage (TTM) |16.37 times |18.91 times |16.33 times | 19.4 times |17.4 times  |

(“Annual reports, 2010, 2009, 2008,” “Reuters, 2011,” “Finance, 2011”)

Current ratio only measures the company’s current assets to its Current Liabilities. It is clearly evident here that the Royal Caribbean’s current liabilities have been steadily rising whereas; its assets are steadily shrinking. A quick ratio, on the other hand, measures the firm’s capability to pay off its debts without relying on the sale of its inventories. Even though, RCL’s quick ratio has grown compared to 2009 levels it is still below the...