Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Expedia Group Inc., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
An analysis of solvency ratios reveals a significant deterioration in the financial structure between 2017 and 2021, characterized by a substantial increase in leverage and a marked decline in the capacity to service debt obligations, particularly from 2020 onward.
- Capital Structure and Leverage
- A sharp escalation in leverage is evident, as the debt to equity ratio rose from 0.94 in 2017 to 4.11 by 2021. This trend is further supported by the debt to capital ratio, which increased from 0.48 to 0.80 over the same period, indicating that debt has become the predominant component of the capital structure. Financial leverage exhibited a consistent upward trajectory, growing from 4.09 in 2017 to 10.48 in 2021, signifying an aggressive increase in the use of debt to finance assets.
- Asset-Based Solvency
- The debt to assets ratio remained relatively stable between 2017 and 2019, hovering around 0.21 to 0.23. However, a significant spike occurred in 2020, reaching 0.44, before correcting slightly to 0.39 in 2021. When operating lease liabilities are included, these ratios are marginally higher, confirming a heightened reliance on debt relative to the total asset base starting in the 2020 fiscal year.
- Debt Servicing Capacity
- Coverage ratios indicate a severe volatility event in 2020. Interest coverage improved from 3.29 in 2017 to a peak of 5.48 in 2019, but collapsed to -7.75 in 2020, reflecting an inability to cover interest expenses with operating income. Although the ratio recovered to 0.89 in 2021, it remains below 1.0, suggesting that earnings are still insufficient to meet interest obligations. Fixed charge coverage mirrors this pattern, dropping from 3.26 in 2019 to -4.29 in 2020, with a partial recovery to 0.52 in 2021.
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Debt to Equity
Expedia Group Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 735) | —) | 749) | —) | 500) | |
| Long-term debt, excluding current maturities | 7,715) | 8,216) | 4,189) | 3,717) | 3,749) | |
| Total debt | 8,450) | 8,216) | 4,938) | 3,717) | 4,249) | |
| Total Expedia Group, Inc. stockholders’ equity | 2,057) | 2,532) | 3,967) | 4,104) | 4,522) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 4.11 | 3.24 | 1.24 | 0.91 | 0.94 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Amazon.com Inc. | 0.54 | — | — | — | — | |
| Home Depot Inc. | 11.29 | — | — | — | — | |
| Lowe’s Cos. Inc. | 15.16 | — | — | — | — | |
| TJX Cos. Inc. | 1.04 | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 0.93 | — | — | — | — | |
| Debt to Equity, Industry | ||||||
| Consumer Discretionary | 1.50 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Total Expedia Group, Inc. stockholders’ equity
= 8,450 ÷ 2,057 = 4.11
2 Click competitor name to see calculations.
Between 2017 and 2021, a pronounced deterioration in solvency metrics is observed, characterized by a simultaneous increase in total debt and a consistent decrease in stockholders' equity. This divergence has resulted in a substantial increase in financial leverage over the five-year period.
- Total Debt Trends
- Total debt levels remained relatively stable through 2018 before entering a period of rapid expansion. A significant surge occurred between 2019 and 2020, during which debt increased from 4,938 million to 8,216 million, eventually reaching 8,450 million by the end of 2021.
- Stockholders' Equity Trends
- A continuous downward trend is observed in stockholders' equity throughout the analyzed timeframe. From a peak of 4,522 million in 2017, equity declined to 2,057 million by 2021, representing a reduction of more than 50% in the equity base.
- Debt to Equity Ratio Analysis
- The debt to equity ratio increased exponentially, rising from 0.94 in 2017 to 4.11 in 2021. After maintaining a ratio below 1.0 through 2018, the metric escalated sharply in 2020 and 2021, indicating a transition to a highly leveraged capital structure where borrowed funds significantly outweigh shareholder investment.
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Debt to Equity (including Operating Lease Liability)
Expedia Group Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 735) | —) | 749) | —) | 500) | |
| Long-term debt, excluding current maturities | 7,715) | 8,216) | 4,189) | 3,717) | 3,749) | |
| Total debt | 8,450) | 8,216) | 4,938) | 3,717) | 4,249) | |
| Current operating lease liabilities (included within Accrued expenses and other current liabilities) | 77) | 126) | 119) | —) | —) | |
| Long-term operating lease liabilities | 360) | 513) | 532) | —) | —) | |
| Total debt (including operating lease liability) | 8,887) | 8,855) | 5,589) | 3,717) | 4,249) | |
| Total Expedia Group, Inc. stockholders’ equity | 2,057) | 2,532) | 3,967) | 4,104) | 4,522) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 4.32 | 3.50 | 1.41 | 0.91 | 0.94 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Amazon.com Inc. | 0.96 | — | — | — | — | |
| Home Depot Inc. | 13.16 | — | — | — | — | |
| Lowe’s Cos. Inc. | 18.24 | — | — | — | — | |
| TJX Cos. Inc. | 2.66 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Consumer Discretionary Distribution & Retail | 1.46 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | 1.87 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Expedia Group, Inc. stockholders’ equity
= 8,887 ÷ 2,057 = 4.32
2 Click competitor name to see calculations.
A significant deterioration in the solvency position is observed between 2017 and 2021. The capital structure transitioned from a relatively balanced state to one characterized by high leverage, driven by a simultaneous increase in total liabilities and a substantial decline in stockholders' equity.
- Total Debt (including operating lease liability)
- Total debt experienced a slight contraction in 2018, falling to 3,717 million US$. However, this was followed by a period of rapid escalation, with debt levels rising to 5,589 million US$ in 2019 and surging to 8,855 million US$ by 2020. The level remained relatively stable into 2021, ending at 8,887 million US$.
- Total Stockholders' Equity
- A consistent and accelerating downward trend is evident in the equity accounts. From a high of 4,522 million US$ in 2017, equity declined steadily to 3,967 million US$ by 2019. A more pronounced collapse occurred between 2019 and 2021, with the balance dropping to 2,057 million US$, representing a reduction of over 50% from the initial 2017 level.
- Debt to Equity Ratio
- The debt to equity ratio grew exponentially over the five-year period. While the ratio remained stable near 0.91 to 0.94 in 2017 and 2018, it climbed to 1.41 in 2019. The most critical shift occurred in 2020, where the ratio jumped to 3.50, before reaching a peak of 4.32 in 2021. This trajectory indicates a shift toward a highly leveraged financial position, where debt obligations significantly outweigh the equity base.
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Debt to Capital
Expedia Group Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 735) | —) | 749) | —) | 500) | |
| Long-term debt, excluding current maturities | 7,715) | 8,216) | 4,189) | 3,717) | 3,749) | |
| Total debt | 8,450) | 8,216) | 4,938) | 3,717) | 4,249) | |
| Total Expedia Group, Inc. stockholders’ equity | 2,057) | 2,532) | 3,967) | 4,104) | 4,522) | |
| Total capital | 10,507) | 10,748) | 8,905) | 7,821) | 8,771) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.80 | 0.76 | 0.55 | 0.48 | 0.48 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Amazon.com Inc. | 0.35 | — | — | — | — | |
| Home Depot Inc. | 0.92 | — | — | — | — | |
| Lowe’s Cos. Inc. | 0.94 | — | — | — | — | |
| TJX Cos. Inc. | 0.51 | — | — | — | — | |
| Debt to Capital, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 0.48 | — | — | — | — | |
| Debt to Capital, Industry | ||||||
| Consumer Discretionary | 0.60 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 8,450 ÷ 10,507 = 0.80
2 Click competitor name to see calculations.
The company's capital structure underwent a significant shift between 2017 and 2021, characterized by a substantial increase in leverage. While the debt-to-capital ratio remained stable in the early part of the period, a sharp upward trajectory began in 2019 and accelerated through 2021, indicating a growing reliance on borrowed funds relative to total capital.
- Debt to Capital Ratio
- The ratio remained constant at 0.48 through 2017 and 2018 before rising to 0.55 in 2019. A significant escalation occurred in 2020, where the ratio climbed to 0.76, eventually reaching 0.80 by December 31, 2021. This progression reflects a transition from a balanced capital structure to one heavily dominated by debt.
- Total Debt Trends
- Total debt experienced a slight decrease from 4,249 million US$ in 2017 to 3,717 million US$ in 2018. However, this was followed by a period of rapid expansion, with debt increasing to 4,938 million US$ in 2019 and surging to 8,216 million US$ in 2020. By the end of 2021, total debt reached its peak at 8,450 million US$.
- Total Capital Evolution
- Total capital fluctuated from 8,771 million US$ in 2017 to 7,821 million US$ in 2018, before trending upward to 10,748 million US$ in 2020. A slight contraction to 10,507 million US$ was observed in 2021. Because the increase in total capital was driven primarily by the accumulation of debt rather than equity growth, the overall solvency profile weakened over the five-year period.
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Debt to Capital (including Operating Lease Liability)
Expedia Group Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 735) | —) | 749) | —) | 500) | |
| Long-term debt, excluding current maturities | 7,715) | 8,216) | 4,189) | 3,717) | 3,749) | |
| Total debt | 8,450) | 8,216) | 4,938) | 3,717) | 4,249) | |
| Current operating lease liabilities (included within Accrued expenses and other current liabilities) | 77) | 126) | 119) | —) | —) | |
| Long-term operating lease liabilities | 360) | 513) | 532) | —) | —) | |
| Total debt (including operating lease liability) | 8,887) | 8,855) | 5,589) | 3,717) | 4,249) | |
| Total Expedia Group, Inc. stockholders’ equity | 2,057) | 2,532) | 3,967) | 4,104) | 4,522) | |
| Total capital (including operating lease liability) | 10,944) | 11,387) | 9,556) | 7,821) | 8,771) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.81 | 0.78 | 0.58 | 0.48 | 0.48 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Amazon.com Inc. | 0.49 | — | — | — | — | |
| Home Depot Inc. | 0.93 | — | — | — | — | |
| Lowe’s Cos. Inc. | 0.95 | — | — | — | — | |
| TJX Cos. Inc. | 0.73 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Consumer Discretionary Distribution & Retail | 0.59 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | 0.65 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 8,887 ÷ 10,944 = 0.81
2 Click competitor name to see calculations.
Between 2017 and 2021, the company's solvency profile shifted from a balanced capital structure to one heavily reliant on debt. The progression indicates a significant increase in financial leverage, characterized by a sharp rise in liabilities that outpaced the growth of total capital.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a slight decline between 2017 and 2018, moving from US$ 4,249 million to US$ 3,717 million. Following this period, a substantial upward trend is observed, with debt increasing to US$ 5,589 million in 2019 and further accelerating to US$ 8,887 million by the end of 2021.
- Total Capital Evolution
- Total capital grew from US$ 8,771 million in 2017 to a peak of US$ 11,387 million in 2020. In 2021, a slight contraction occurred, with total capital decreasing to US$ 10,944 million. This decrease in total capital, occurring while total debt remained virtually flat, contributed to the intensification of the leverage ratio.
- Debt to Capital Ratio Analysis
- The debt-to-capital ratio remained stable at 0.48 throughout 2017 and 2018. A consistent increase followed, with the ratio rising to 0.58 in 2019, 0.78 in 2020, and reaching 0.81 by December 31, 2021. This trend signifies that by the end of the analysis period, debt represented over 80% of the company's total capital, indicating a marked increase in financial risk and a heavier reliance on borrowed funds.
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Debt to Assets
Expedia Group Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 735) | —) | 749) | —) | 500) | |
| Long-term debt, excluding current maturities | 7,715) | 8,216) | 4,189) | 3,717) | 3,749) | |
| Total debt | 8,450) | 8,216) | 4,938) | 3,717) | 4,249) | |
| Total assets | 21,548) | 18,690) | 21,416) | 18,033) | 18,516) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.39 | 0.44 | 0.23 | 0.21 | 0.23 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Amazon.com Inc. | 0.18 | — | — | — | — | |
| Home Depot Inc. | 0.53 | — | — | — | — | |
| Lowe’s Cos. Inc. | 0.47 | — | — | — | — | |
| TJX Cos. Inc. | 0.20 | — | — | — | — | |
| Debt to Assets, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 0.24 | — | — | — | — | |
| Debt to Assets, Industry | ||||||
| Consumer Discretionary | 0.36 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 8,450 ÷ 21,548 = 0.39
2 Click competitor name to see calculations.
The solvency profile of the organization experienced a significant shift between 2017 and 2021, moving from a period of relative stability to one of increased leverage. While the debt-to-assets ratio remained consistent in the early part of the period, a substantial spike in 2020 altered the capital structure, followed by a partial correction in 2021.
- Total Debt Evolution
- Total debt remained relatively stable between 2017 and 2019, fluctuating between 3,717 million and 4,938 million US dollars. However, a sharp increase occurred in 2020, where debt rose to 8,216 million US dollars, representing a 66% increase over the previous year. This upward trajectory continued into 2021, reaching 8,450 million US dollars.
- Total Asset Fluctuations
- The asset base showed volatility during the observed period. After growing to a peak of 21,416 million US dollars in 2019, total assets contracted to 18,690 million US dollars in 2020. A recovery was observed in 2021, with assets increasing to 21,548 million US dollars, returning to levels seen prior to the 2020 contraction.
- Debt to Assets Ratio Analysis
- The debt to assets ratio was maintained at a low and stable level of 0.21 to 0.23 from 2017 through 2019. In 2020, the ratio surged to 0.44, driven by the simultaneous increase in total debt and the decrease in total assets. By 2021, the ratio declined to 0.39, an improvement attributed primarily to the expansion of the asset base despite the continued marginal increase in total debt.
Overall, the data indicates a marked increase in financial leverage starting in 2020. Although the 2021 figures show a slight improvement in the solvency ratio, the company remains more heavily leveraged than it was during the 2017-2019 period.
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Debt to Assets (including Operating Lease Liability)
Expedia Group Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 735) | —) | 749) | —) | 500) | |
| Long-term debt, excluding current maturities | 7,715) | 8,216) | 4,189) | 3,717) | 3,749) | |
| Total debt | 8,450) | 8,216) | 4,938) | 3,717) | 4,249) | |
| Current operating lease liabilities (included within Accrued expenses and other current liabilities) | 77) | 126) | 119) | —) | —) | |
| Long-term operating lease liabilities | 360) | 513) | 532) | —) | —) | |
| Total debt (including operating lease liability) | 8,887) | 8,855) | 5,589) | 3,717) | 4,249) | |
| Total assets | 21,548) | 18,690) | 21,416) | 18,033) | 18,516) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.41 | 0.47 | 0.26 | 0.21 | 0.23 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Amazon.com Inc. | 0.31 | — | — | — | — | |
| Home Depot Inc. | 0.62 | — | — | — | — | |
| Lowe’s Cos. Inc. | 0.56 | — | — | — | — | |
| TJX Cos. Inc. | 0.50 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Consumer Discretionary Distribution & Retail | 0.38 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | 0.44 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 8,887 ÷ 21,548 = 0.41
2 Click competitor name to see calculations.
The solvency profile between 2017 and 2021 is characterized by a significant increase in financial leverage, particularly during the 2020 fiscal year, followed by a modest stabilization in 2021.
- Debt Accumulation Trends
- Total debt, including operating lease liabilities, remained relatively stable between 2017 and 2018, decreasing from US$ 4,249 million to US$ 3,717 million. A growth trend emerged in 2019, with debt rising to US$ 5,589 million, culminating in a sharp increase to US$ 8,855 million by the end of 2020. This level of indebtedness remained largely stagnant through 2021, ending at US$ 8,887 million.
- Asset Base Volatility
- Total assets exhibited fluctuations throughout the period. Following a slight decline in 2018, assets grew to a peak of US$ 21,416 million in 2019. A contraction occurred in 2020, with assets falling to US$ 18,690 million, before recovering to US$ 21,548 million in 2021.
- Debt to Assets Ratio Analysis
- The debt to assets ratio reflects a period of relative stability from 2017 to 2019, moving from 0.23 to 0.26. A substantial spike is observed in 2020, where the ratio reached 0.47, indicating that nearly half of the asset base was financed through debt. By 2021, the ratio decreased to 0.41, a change primarily attributed to the expansion of total assets rather than a reduction in total debt obligations.
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Financial Leverage
Expedia Group Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 21,548) | 18,690) | 21,416) | 18,033) | 18,516) | |
| Total Expedia Group, Inc. stockholders’ equity | 2,057) | 2,532) | 3,967) | 4,104) | 4,522) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 10.48 | 7.38 | 5.40 | 4.39 | 4.09 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Amazon.com Inc. | 3.04 | — | — | — | — | |
| Home Depot Inc. | 21.39 | — | — | — | — | |
| Lowe’s Cos. Inc. | 32.52 | — | — | — | — | |
| TJX Cos. Inc. | 5.28 | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 3.82 | — | — | — | — | |
| Financial Leverage, Industry | ||||||
| Consumer Discretionary | 4.22 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Total Expedia Group, Inc. stockholders’ equity
= 21,548 ÷ 2,057 = 10.48
2 Click competitor name to see calculations.
An analysis of solvency indicators from 2017 through 2021 reveals a significant and accelerating increase in financial leverage. While total assets remained relatively volatile but stable within a range of US$ 18 billion to US$ 21.5 billion, stockholders' equity experienced a consistent and substantial decline over the same period.
- Financial Leverage Trajectory
- The financial leverage ratio exhibits a continuous upward trend, rising from 4.09 in 2017 to 10.48 in 2021. This represents a more than twofold increase in the ratio over five years, with the most aggressive expansion occurring between 2019 and 2021, where the ratio climbed from 5.40 to 10.48.
- Equity Erosion
- A persistent reduction in stockholders' equity is observed, falling from US$ 4,522 million in 2017 to US$ 2,057 million by December 31, 2021. This downward trend indicates a significant contraction of the equity base, which decreased by approximately 54.5% over the analyzed period.
- Capital Structure Shift
- The increase in financial leverage is primarily driven by the divergence between stagnant or fluctuating asset levels and a shrinking equity base. By 2021, the organization's assets were funded by an equity base significantly smaller than that of 2017, resulting in a capital structure characterized by a much higher reliance on liabilities to support its asset portfolio.
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Interest Coverage
Expedia Group Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Expedia Group, Inc. | 12) | (2,612) | 565) | 406) | 378) | |
| Add: Net income attributable to noncontrolling interest | 3) | (116) | 7) | (8) | (7) | |
| Add: Income tax expense | (53) | (423) | 203) | 87) | 45) | |
| Add: Interest expense | 351) | 360) | 173) | 190) | 182) | |
| Earnings before interest and tax (EBIT) | 313) | (2,791) | 948) | 675) | 598) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 0.89 | -7.75 | 5.48 | 3.55 | 3.29 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Amazon.com Inc. | 22.09 | — | — | — | — | |
| Home Depot Inc. | 13.60 | — | — | — | — | |
| Lowe’s Cos. Inc. | 9.88 | — | — | — | — | |
| TJX Cos. Inc. | 1.46 | — | — | — | — | |
| Interest Coverage, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 15.91 | — | — | — | — | |
| Interest Coverage, Industry | ||||||
| Consumer Discretionary | 13.23 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 313 ÷ 351 = 0.89
2 Click competitor name to see calculations.
The interest coverage analysis reveals a period of strengthening solvency followed by a severe contraction and a fragile recovery. Between 2017 and 2019, there was a consistent increase in the ability to service debt, which was subsequently reversed by a significant operational loss and increased interest burdens in 2020 and 2021.
- Operational Profitability and Interest Capacity (2017-2019)
- A positive trend is observed in the initial period, where Earnings before interest and tax (EBIT) increased steadily from 598 million in 2017 to 948 million in 2019. During this time, interest expenses remained relatively stable, fluctuating between 173 million and 190 million. This resulted in a strengthening interest coverage ratio, which peaked at 5.48 in 2019, indicating a robust margin of safety for debt obligations.
- Financial Distress and Solvency Shock (2020)
- A critical reversal occurred in 2020, characterized by a substantial collapse in EBIT to negative 2,791 million. Simultaneously, interest expenses surged to 360 million, representing a significant increase over the previous years. The resulting interest coverage ratio of -7.75 indicates that operational losses were compounded by high financing costs, leaving the company unable to cover its interest obligations from earnings.
- Partial Recovery and Current Solvency Status (2021)
- By 2021, EBIT returned to positive territory at 313 million, although this remained well below pre-2020 levels. Interest expenses remained elevated at 351 million. Consequently, the interest coverage ratio improved to 0.89. As this ratio remains below 1.0, it is evident that operating earnings are currently insufficient to fully cover the annual interest expense, suggesting persistent solvency pressure.
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Fixed Charge Coverage
Expedia Group Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| U.S. federal statutory income tax rate | 21.00% | 21.00% | 21.00% | 21.00% | 35.00% | |
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Expedia Group, Inc. | 12) | (2,612) | 565) | 406) | 378) | |
| Add: Net income attributable to noncontrolling interest | 3) | (116) | 7) | (8) | (7) | |
| Add: Income tax expense | (53) | (423) | 203) | 87) | 45) | |
| Add: Interest expense | 351) | 360) | 173) | 190) | 182) | |
| Earnings before interest and tax (EBIT) | 313) | (2,791) | 948) | 675) | 598) | |
| Add: Operating lease costs | 119) | 159) | 170) | 182) | 168) | |
| Earnings before fixed charges and tax | 432) | (2,632) | 1,118) | 857) | 766) | |
| Interest expense | 351) | 360) | 173) | 190) | 182) | |
| Operating lease costs | 119) | 159) | 170) | 182) | 168) | |
| Preferred stock dividend and loss on redemption of preferred stock | 281) | 75) | —) | —) | —) | |
| Preferred stock dividend and loss on redemption of preferred stock, tax adjustment1 | 75) | 20) | —) | —) | —) | |
| Preferred stock dividend and loss on redemption of preferred stock, after tax adjustment | 356) | 95) | —) | —) | —) | |
| Fixed charges | 826) | 614) | 343) | 372) | 350) | |
| Solvency Ratio | ||||||
| Fixed charge coverage2 | 0.52 | -4.29 | 3.26 | 2.30 | 2.19 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors3 | ||||||
| Amazon.com Inc. | 5.24 | — | — | — | — | |
| Home Depot Inc. | 8.97 | — | — | — | — | |
| Lowe’s Cos. Inc. | 6.05 | — | — | — | — | |
| TJX Cos. Inc. | 1.04 | — | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 5.29 | — | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Consumer Discretionary | 5.60 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Preferred stock dividend and loss on redemption of preferred stock, tax adjustment = (Preferred stock dividend and loss on redemption of preferred stock × U.S. federal statutory income tax rate) ÷ (1 − U.S. federal statutory income tax rate)
= (281 × 21.00%) ÷ (1 − 21.00%) = 75
2 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 432 ÷ 826 = 0.52
3 Click competitor name to see calculations.
The analysis of fixed charge coverage reveals a trajectory of growth, followed by a severe contraction and a subsequent partial recovery between 2017 and 2021.
- Earnings Before Fixed Charges and Tax
- Earnings showed a steady upward trend from 2017 to 2019, increasing from 766 million USD to a peak of 1,118 million USD. This growth was abruptly reversed in 2020, when earnings fell to a deficit of 2,632 million USD. A return to positive earnings was observed in 2021 at 432 million USD, although this figure represents a significant decrease compared to the pre-2020 levels.
- Fixed Charges
- Fixed charges remained relatively stable between 2017 and 2019, ranging from 343 million to 372 million USD. Starting in 2020, there was a sharp increase in these obligations, rising to 614 million USD and further escalating to 826 million USD by 2021. This indicates a substantial increase in the mandatory financial burdens the company had to service.
- Fixed Charge Coverage Ratio
- The coverage ratio improved from 2.19 in 2017 to 3.26 in 2019, indicating a strengthening ability to meet fixed obligations. In 2020, the ratio plummeted to -4.29, signaling a critical inability to cover fixed charges through operating earnings. While the ratio recovered to 0.52 in 2021, the value remained below the 1.0 threshold, implying that earnings were still insufficient to fully cover fixed charges during that period.
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