Expedia Group Inc. (NASDAQ:EXPE)

Return on Assets (ROA)

The Return on Assets exhibited a rising trend from 2.04% in 2017 to 2.64% in 2019, indicating improving asset efficiency during that period. However, there was a significant decline in 2020, dropping sharply to -13.98%, followed by a recovery to a near neutral 0.06% in 2021.

Financial Leverage

Financial Leverage consistently increased throughout the timeframe, starting at a ratio of 4.09 in 2017 and rising steadily each year to reach 10.48 in 2021. This points to a growing reliance on debt or other forms of leverage over the years.

Return on Equity (ROE)

Return on Equity demonstrated an upward trajectory from 8.36% in 2017 to 14.24% in 2019, reflecting enhanced profitability from shareholders' equity. Nevertheless, similar to ROA, ROE experienced a dramatic drop in 2020 to -103.16%, indicating substantial losses. The figure rebounded somewhat in 2021 to 0.58%, though it remained far below pre-2020 levels.

Overall Observations

The period before 2020 showed steady improvements in profitability metrics (ROA and ROE) alongside increasing financial leverage. The year 2020 marked a significant downturn in profitability, likely related to extraordinary circumstances impacting asset returns and shareholders' equity. Despite continued growth in financial leverage during 2020 and 2021, profitability metrics only partially recovered by 2021. The overall pattern suggests heightened financial risk due to increased leverage amid volatile returns.

Net Profit Margin

The net profit margin showed a relatively stable positive trend from 2017 to 2019, fluctuating slightly between 3.62% and 4.68%. In 2020, a dramatic decline occurred with the margin dropping sharply to -50.24%, indicating a substantial loss during that period. By 2021, there was a recovery towards profitability, but the margin remained very low at 0.14%, suggesting the company was still struggling to regain its pre-2020 profitability levels.

Asset Turnover

Asset turnover displayed moderate variability over the analyzed years. Starting at 0.54 in 2017, the ratio increased to 0.62 in 2018, reflecting improved efficiency in using assets to generate revenue. It then declined to 0.56 in 2019 and experienced a significant drop to 0.28 in 2020, which coincides with the period of poor profitability. There was some recovery in 2021 with the ratio rising to 0.4, indicating a partial rebound in operational efficiency.

Financial Leverage

Financial leverage increased consistently over the period, rising from 4.09 in 2017 to 10.48 in 2021. This upward trajectory suggests the company increasingly relied on debt or other liabilities relative to equity to finance its assets. The sharp rise, particularly from 2020 onwards, may indicate heightened financial risk and greater dependency on leverage during and following the challenging operating environment.

Return on Equity (ROE)

Return on equity demonstrated a positive growth trend from 2017 through 2019, moving from 8.36% to a peak of 14.24% in 2019, indicating effective use of shareholder equity to generate profits. However, 2020 saw a pronounced negative return of -103.16%, aligning with the extraordinary losses reflected in other metrics. In 2021, there was a significant recovery to 0.58%, but this value remained far below the pre-2020 levels, highlighting ongoing challenges in achieving sustainable equity returns.

Tax Burden

The tax burden ratio shows a declining trend from 0.89 in 2017 to 0.74 in 2019, with no data available for 2020 and 2021. This decline suggests a gradual decrease in the proportion of earnings paid as tax over the initial three years.

Interest Burden

The interest burden ratio remained relatively stable around 0.7 to 0.82 from 2017 through 2019, indicating consistent interest expense relative to earnings before interest and taxes. However, data is missing for 2020, and the 2021 figure is negative at -0.13, which may indicate unusual interest expense or interest income patterns impacting earnings.

EBIT Margin

The EBIT margin showed a modest increase from 6.01% in 2017 to 7.8% in 2019, reflecting improved operational profitability. However, in 2020, there was a significant negative drop to -51.45%, indicating a severe operational loss, possibly due to extraordinary circumstances. The margin partially recovered in 2021 to 3.61%, still well below pre-2020 levels.

Asset Turnover

Asset turnover increased from 0.54 in 2017 to 0.62 in 2018, then decreased somewhat to 0.56 in 2019. There was a sharp decline to 0.28 in 2020, implying reduced efficiency in generating sales from assets during that year. It improved moderately to 0.4 in 2021 but remained below earlier years’ figures.

Financial Leverage

Financial leverage steadily increased over the period, starting at 4.09 in 2017 and rising significantly to 10.48 in 2021. This indicates a growing use of debt or equity financing relative to assets, suggesting increased financial risk and reliance on external funding.

Return on Equity (ROE)

ROE improved from 8.36% in 2017 to a peak of 14.24% in 2019, showing enhanced profitability from shareholders’ perspective. In 2020, there was a drastic decline to -103.16%, reflecting large net losses, consistent with negative EBIT margin. In 2021, ROE recovered nominally to 0.58%, indicating continued poor profitability relative to equity.

The financial ratios over the five-year period exhibit notable fluctuations, particularly influenced by the year 2020.

Net Profit Margin

The net profit margin displayed a generally stable and positive trend from 2017 through 2019, ranging between 3.62% and 4.68%. However, in 2020, the margin experienced a severe contraction, plunging to -50.24%, indicating a significant loss relative to sales. This negative margin suggests extraordinary operational or market challenges during that year. In 2021, the margin slightly recovered to a positive but minimal level of 0.14%, remaining substantially below pre-2020 levels.

Asset Turnover

Asset turnover demonstrated moderate variability across the periods. It increased from 0.54 in 2017 to 0.62 in 2018, then declined to 0.56 in 2019. The ratio dropped sharply in 2020 to 0.28, reflecting reduced efficiency in using assets to generate revenue, consistent with the disruption seen in profitability. In 2021, there was a partial recovery to 0.4, indicating an improvement in asset utilization though still below the earlier years.

Return on Assets (ROA)

ROA followed a pattern similar to net profit margin, rising gradually from 2.04% in 2017 to 2.64% in 2019. A dramatic decline occurred in 2020, with ROA falling to -13.98%, signaling substantial negative returns on assets during that period. The ratio rebounded slightly in 2021 to 0.06%, which denotes a return to positive but extremely low asset profitability.

Overall, the data reflects a period of stability and moderate growth in efficiency and profitability prior to 2020, followed by a significant downturn coinciding with 2020, likely indicative of extraordinary adverse conditions. The year 2021 shows early signs of recovery, but key performance metrics remain well below their pre-2020 levels.

The financial data reveals several notable trends and shifts over the analyzed periods. Key profitability and efficiency metrics demonstrate distinct patterns that reflect operational and financial challenges, especially during the year 2020.

Tax Burden

The tax burden ratio shows a decline from 0.89 in 2017 to 0.74 in 2019, indicating a decreasing proportion of earnings paid as tax during this period. Data for 2020 and 2021 are missing, preventing assessment for those years.

Interest Burden

This ratio exhibits a slight increase from 0.70 in 2017 to 0.82 in 2019, suggesting that interest expenses consumed a smaller portion of earnings before interest and taxes. However, the ratio becomes negative (-0.13) in 2021, indicating an unusual financial event or possible data anomaly in that year.

EBIT Margin

The EBIT margin shows a modest upward trend from 6.01% in 2017 to 7.8% in 2019, reflecting improving operational profitability. A significant decline occurs in 2020, with a sharp drop to -51.45%, highlighting a severe operational loss possibly linked to extraordinary circumstances during that year. A recovery to 3.61% follows in 2021, though profitability remains below pre-2020 levels.

Asset Turnover

The asset turnover ratio increases from 0.54 in 2017 to 0.62 in 2018 but then decreases to 0.56 in 2019, indicating a slight reduction in asset utilization efficiency. A substantial decline to 0.28 in 2020 suggests diminished operational activity or efficiency. Some recovery to 0.40 is observed in 2021, yet efficiency remains below earlier peak levels.

Return on Assets (ROA)

ROA follows a modest growth trajectory from 2.04% in 2017 to 2.64% in 2019, underscoring improving returns generated from assets. In 2020, ROA plunges drastically to -13.98%, mirroring the negative EBIT margin and signaling significant losses. A near breakeven ROA of 0.06% in 2021 reflects a minimal recovery, with profitability still substantially impaired relative to pre-2020 years.

Overall, the data indicates an initial period of gradual improvement in profitability and asset efficiency through 2019, followed by a pronounced operational and financial downturn in 2020. The subsequent year shows early signs of recovery, though performance metrics have not yet returned to prior levels. This pattern suggests that the company faced significant challenges in 2020, likely impacting earnings capacity and asset utilization substantially.

Tax Burden

The tax burden ratio shows a declining trend from 0.89 in 2017 to 0.74 in 2019, indicating a reduction in the proportion of earnings paid as taxes over this period. Data for 2020 and 2021 is missing, preventing analysis for those years.

Interest Burden

The interest burden ratio remains relatively stable from 2017 (0.70) through 2019 (0.82), showing a slight improvement in managing interest expenses relative to earnings. However, data for 2020 is missing, and in 2021 the ratio sharply decreases to -0.13, signaling a significant change, potentially indicative of financial distress or negative operating income before interest.

EBIT Margin

The EBIT margin exhibits stability and slight growth from 6.01% in 2017 to 7.8% in 2019. This is followed by a dramatic decline to -51.45% in 2020, signaling a substantial operating loss, potentially due to extraordinary economic or industry-specific factors. In 2021, there is a recovery to 3.61%, suggesting partial operational improvement, though still below pre-2020 levels.

Net Profit Margin

The net profit margin similarly reflects stable but modest profitability from 3.76% in 2017 to 4.68% in 2019. In 2020, the margin plunges steeply to -50.24%, denoting a significant net loss. By 2021, the margin recovers to a marginally positive 0.14%, indicating close to break-even performance but with very limited profitability.