Expedia Group Inc. (NASDAQ:EXPE)

Debt to Equity Ratios

The debt to equity ratio remained relatively stable and moderate from early 2018 through 2019, fluctuating between 0.85 and 1.24. Beginning in the first quarter of 2020, there was a sharp increase, peaking at 5.28 in mid-2021 before decreasing somewhat but remaining elevated around 3.7 to 4.1 in 2022. When including operating lease liabilities, the trend and magnitude were similar, indicating that lease obligations contributed modestly to the overall leverage but did not alter the pattern significantly.

Debt to Capital Ratios

This ratio hovered near 0.5 through 2018 and 2019, indicating moderate reliance on debt relative to capital. Starting in early 2020, a notable increase occurred, with the ratio rising to values near 0.8 or above and maintaining that level into 2022. Including operating lease liabilities led to slightly higher ratios but with the same upward trend, reflecting increased leverage during the pandemic period and after.

Debt to Assets Ratios

Debt relative to total assets was stable and modest around 0.19 to 0.23 through 2018 and 2019. From 2020 onwards, this ratio increased sharply, peaking near 0.45 by late 2020 before gradually declining to around 0.31 in early 2022. Including operating lease liabilities, the ratios were consistently slightly higher but mirrored this general pattern. The increase during 2020 signals heightened leverage and asset financing stress during that period.

Financial Leverage Ratio

Financial leverage maintained steady values in the range of approximately 4.3 to 5.4 from 2018 to 2019. A significant surge occurred in the quarters following early 2020, climbing to a peak of 15.05 in mid-2021 before falling somewhat yet remaining elevated above 10 into 2022. This increase suggests a pronounced reliance on debt financing and potentially reduced equity or asset base during that timeframe.

Interest Coverage Ratio

Interest coverage was positive and improving from early 2018 through 2019, reaching peak values above 5.5. However, from the first quarter of 2020, the ratio turned sharply negative, with values decreasing to as low as -7.75 by late 2020, indicating inability to cover interest expenses via operating earnings. A recovery began in 2021, with ratios improving from negative territory to positive levels around 2.5 by early 2022. This shift reflects a period of financial stress and reduced profitability followed by gradual operational improvements.

Overall Analysis

The company experienced relatively stable leverage and strong interest coverage before 2020. Starting with the onset of the COVID-19 pandemic, there was a significant increase in debt ratios and financial leverage, accompanied by a decline in interest coverage into negative territory. This scenario suggests increased borrowing and reduced earnings capacity, likely due to pandemic-related impacts. Subsequent quarters show signs of deleveraging and operational recovery, though leverage remains historically elevated and interest coverage has only partially normalized by early 2022. The trends denote a period of financial strain followed by gradual stabilization.

Total Debt

The total debt level remained relatively stable around the 3,700-4,900 million USD range from March 2018 through December 2019. A significant increase was observed starting in the first quarter of 2020, with debt peaking at 9,553 million USD in June 2020. Following this peak, total debt gradually declined through March 2022, ending at 7,719 million USD. Despite this reduction, debt levels in early 2022 remained higher than pre-2020 figures.

Total Stockholders’ Equity

Stockholders’ equity experienced minor fluctuations in the 3,900 to 4,400 million USD range from March 2018 through December 2019. However, starting in March 2020, equity sharply dropped to 2,270 million USD and remained at lower levels, fluctuating between 1,600 and 2,600 million USD through March 2022. Although there were modest recoveries in some quarters, equity did not return to pre-2020 levels during this timeframe.

Debt to Equity Ratio

The debt to equity ratio was relatively stable and below 1.25 until the end of 2019, indicating balanced leverage. A marked increase occurred in the first quarter of 2020, with the ratio rising sharply to 3.01 and peaking at 5.28 in June 2021. Subsequently, the ratio decreased somewhat but remained elevated above 3.7 by March 2022. This suggests a significant increase in leverage following the early 2020 period and a sustained higher level of financial risk.

Overall Analysis

The data indicates a material shift in financial structure beginning in early 2020, characterized by a substantial rise in debt concurrently with a notable reduction in stockholders’ equity. This shift resulted in a considerable increase in the company's leverage ratios, reflecting heightened financial risk and a changed capital structure. While some debt reduction and equity stabilization occurred after mid-2020, leverage remains significantly higher than the pre-2020 period.

The financial data indicates notable fluctuations in both the total debt and stockholders’ equity over the analyzed quarters, with significant impacts on the company's leverage as measured by the debt to equity ratio.

Total Debt (including operating lease liability)

Total debt exhibited a generally increasing trend from the beginning of the period until late 2019, rising from approximately $4.3 billion to about $5.5 billion. Starting in early 2020, a sharp increase is observable, with debt peaking at over $10 billion in the second quarter of 2020. After this peak, the debt level showed a gradual decline but remained elevated relative to the earlier periods, settling near $8.1 billion by the first quarter of 2022.

Total Stockholders’ Equity

Stockholders’ equity remained relatively stable between $4 billion and $4.3 billion from early 2018 through the end of 2019, before experiencing a significant drop starting in the first quarter of 2020. The equity bottomed at around $1.6 billion in the second quarter of 2021 and displayed some recovery thereafter, stabilizing slightly above $2 billion by the first quarter of 2022. Despite this recovery, equity levels in 2022 stayed considerably lower than the pre-2020 figures.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio was close to parity, fluctuating around 1, during the 2018 and 2019 periods, indicating balanced leverage. Beginning in 2020, there was a dramatic spike in this ratio, reaching a peak near 5.5 in the middle of 2021. This reflects the considerable increase in debt combined with the equity decline. Although the ratio declined somewhat after this peak, settling below 4 by the first quarter of 2022, it remained significantly elevated compared to earlier years, signaling a higher financial leverage and potentially increased financial risk.

Overall, the data reveals a critical shift in the company’s capital structure starting in early 2020, coinciding with elevated debt levels and reduced equity. The company’s leverage increased sharply, which suggests reliance on debt financing during this period and heightened financial risk exposure. The modest improvement in equity and leverage metrics in recent quarters indicates some stabilization but does not return to the pre-2020 financial profile.

Total debt

Over the observed periods, total debt exhibited a general upward trend from early 2018 through mid-2020, increasing substantially from approximately $4.3 billion to a peak of around $9.6 billion. This elevation suggests an accumulation of debt likely to support operational or strategic initiatives. Following this peak, total debt showed a gradual reduction, declining to about $7.7 billion by the first quarter of 2022, indicating some deleveraging or debt repayment efforts.

Total capital

Total capital experienced fluctuations but generally rose from roughly $8.5 billion in the first quarter of 2018 to a maximum exceeding $12 billion by mid-2020. This increase reflects enhancements in the company's funding base, possibly through equity infusion or accumulation of debt. Post mid-2020, total capital gradually decreased back to near $9.8 billion by the start of 2022, aligning with the reduction in total debt and suggesting adjustments in the company's capital structure.

Debt to capital ratio

The debt to capital ratio remained relatively stable around the 0.5 mark from 2018 through early 2019, indicating that debt constituted about half of the total capital during this period. However, starting in late 2019, this ratio elevated sharply, peaking near 0.84 in mid-2021. This significant increase points to a higher reliance on debt financing relative to total capital. Towards early 2022, the ratio showed a slight decline but remained elevated near 0.79, reflecting continued substantial leverage.

Summary

The data reveals that the company expanded its debt base considerably from 2018 through 2020, resulting in an increased leverage position as captured by the rising debt to capital ratio. After reaching peak debt levels during the mid-2020 period, the company began to reduce total debt and total capital, which slightly improved the leverage ratio though it stayed relatively high. These patterns may indicate strategic financial decisions to capitalize on borrowing opportunities during earlier periods followed by attempts to strengthen the balance sheet.

The analysis of the quarterly financial data reveals several notable trends in the company's leverage and capital structure over the observed period.

Total Debt

The total debt, inclusive of operating lease liabilities, exhibited a moderate fluctuation from March 2018 through December 2019, ranging between approximately 3.7 billion and 5.5 billion US dollars. Starting from 7.4 billion at March 2020, a marked increase is observed, peaking at about 10.1 billion US dollars by June 2020. Following this peak, there was a gradual decline in total debt levels, reaching roughly 8.1 billion by March 2022. This pattern suggests an aggressive borrowing phase during early 2020, likely in response to external conditions, followed by a measured repayment phase or stabilization.

Total Capital

Total capital, including operating lease liabilities, moved within a narrower range prior to 2020, oscillating between approximately 7.8 billion and 9.5 billion US dollars from March 2018 to December 2019. Starting in March 2020, the capital base grew notably to a high of around 12.9 billion in June 2020, corresponding with the rise in total debt. After mid-2020, total capital exhibited a downward trend, reducing to about 10.1 billion by March 2022, indicating a contraction or normalization of the capital employed in the business.

Debt to Capital Ratio

The ratio of debt to total capital remained relatively stable around the 0.5 mark from early 2018 through late 2019, reflecting a balanced approach to leverage. Beginning in March 2020, this ratio sharply increased to the 0.76–0.79 range, peaking near 0.85 in June 2021 before slightly moderating to approximately 0.80 by March 2022. This escalation highlights a significant rise in leverage coinciding with the period of increased borrowing and capital augmentation. The sustained high ratio post-2020 indicates that debt constituted a larger proportion of the company’s capital structure compared to prior periods.

Overall, the data indicates that the company significantly increased its leverage and capital base around the first half of 2020, likely as a strategic response to changes in its operating environment. Subsequent quarters saw a gradual reduction in both total debt and total capital, along with a partial improvement in the debt-to-capital ratio, though leverage remained elevated relative to pre-2020 levels. These trends underscore a period of financial adjustment with a higher reliance on debt financing, followed by cautious deleveraging efforts.

Total Debt

Total debt remained relatively stable around the 4,200 million USD mark through 2018 and the first half of 2019, with a notable increase starting in Q3 2019. Debt peaked significantly in mid-2020, reaching 9,553 million USD, more than double the earlier period levels. Following this peak, there was a gradual reduction in total debt through 2021 and into early 2022, ending at approximately 7,719 million USD. This indicates a period of substantial borrowing likely linked to external pressures, followed by deleveraging efforts.

Total Assets

Total assets displayed fluctuations but generally trended upwards across the observed quarters. Asset levels dropped during late 2018 reaching a low in Q4 2018, then increased again through 2019. In 2020, total assets showed volatility but remained within the 18,000 to 22,000 million USD range. From 2021 onwards, there was a clear upward trajectory, peaking near 24,577 million USD in early 2022. This growth suggests investments or asset acquisitions that enhanced the company's asset base over time.

Debt to Assets Ratio

The debt to assets ratio was consistently around 0.20 in 2018, indicating moderate leverage. It dipped slightly during early 2019 before jumping sharply in late 2019 and through 2020, reaching its highest point near 0.45. This spike corresponds with the significant increase in total debt at a time when asset levels did not rise proportionately, implying increased financial leverage and potentially higher risk exposure. By 2021 and into early 2022, the ratio declined steadily to about 0.31, reflecting deleveraging and a strengthening asset position relative to debt.

Summary of Trends

Overall, the financial data reveal a period of increased borrowing culminating in mid-2020, likely reflecting efforts to manage liquidity or operational challenges during that time. Concurrently, total assets experienced a modest decline followed by recovery and growth, suggesting strategic asset management. The leverage ratio confirms heightened risk exposure during 2020, followed by prudent deleveraging and asset growth in subsequent periods. The data suggest a company responsive to changing financial conditions, balancing debt levels against asset growth to manage its financial structure.

The analysis of the quarterly financial data reveals several notable trends in the company’s debt and asset positions over the period from March 2018 to March 2022.

Total Debt (Including Operating Lease Liability)

The total debt showed a relatively stable level between approximately $4.2 billion and $5.5 billion from early 2018 through the end of 2019. Beginning in the first quarter of 2020, debt levels increased significantly, peaking around $10.1 billion in mid-2020. After this peak, a gradual reduction occurred through the remaining quarters, with debt declining to about $8.1 billion by March 2022.

Total Assets

Total assets fluctuated throughout the period. Initially, assets hovered around the $18 billion to $21 billion range from 2018 through 2019. A dip was observed towards the end of 2019 and early 2020, with assets falling below $19 billion in some quarters. However, starting mid-2020, assets began to recover and grew notably, reaching approximately $24.6 billion by the first quarter of 2022.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt-to-assets ratio remained relatively stable around 0.20 to 0.26 through 2018 and 2019, indicating moderate leverage. A sharp increase was evident during 2020, peaking at 0.48 in the third quarter of 2020, reflecting a substantial increase in leverage relative to asset size, coinciding with the rise in total debt and temporary asset decline. From late 2020 onwards, this ratio steadily decreased to 0.33 by March 2022, suggesting an improvement in financial leverage as assets increased and debt was reduced.

Overall, the data indicate a period of heightened financial leverage during 2020, likely due to external pressures requiring significant debt increase. Following this period, the company appears to have improved its balance sheet strength by reducing debt levels and growing its asset base, thereby lowering its leverage ratio by early 2022.

The analysis of the financial data reveals several notable trends in the company's balance sheet and leverage over the examined periods.

Total assets

Total assets showed some fluctuations throughout the periods. Initially, assets decreased from $20,429 million at the end of March 2018 to $18,033 million by December 2018, indicating a contraction during that year. Subsequently, there was an increase reaching a peak of $22,201 million in June 2019, followed by moderate declines and recoveries, ending with a significant rise to $24,577 million by March 2022. Overall, total assets demonstrated a recovery and growth trend after a dip in late 2018 and early 2020 periods.

Total stockholders’ equity

Stockholders' equity displayed volatility with a general downward trend. It began at $4,195 million in March 2018 and fluctuated within a range, dropping as low as $1,607 million in June 2021. Despite some increases after this point, equity remained relatively depressed, finishing at $2,078 million in March 2022. This decline in equity contrasts with the overall growth in assets, suggesting changes in the capital structure or accumulation of losses.

Financial leverage

Financial leverage, calculated as the ratio of total assets to stockholders' equity, notably increased over time, indicating a higher dependence on debt or liabilities relative to equity. Starting at 4.87 in March 2018, leverage ratios remained mostly steady around 4 to 5 through 2018 and 2019 but rose sharply from 2020 onward, peaking at 15.05 in June 2021. After this peak, leverage stayed elevated above 10, reaching 11.83 by March 2022. This trend suggests a significant increase in financial risk and reliance on external financing or liabilities in recent years.

In summary, while total assets have generally trended upward with some volatility, stockholders’ equity has declined considerably, contributing to a marked increase in financial leverage. The elevated leverage ratios in recent periods highlight a potentially higher financial risk profile, reflecting a capital structure more heavily weighted towards debt. These patterns are indicative of strategic or operational challenges impacting equity and potentially increased borrowing to support asset growth or operations.

The financial data reveals noteworthy fluctuations in key profitability and solvency metrics over the observed periods.

Earnings Before Interest and Tax (EBIT)

The EBIT shows considerable volatility, with positive values recorded intermittently between 2018 and early 2020, peaking notably in September 2018 and September 2019. The company's operational profitability appeared robust during these peak periods. However, beginning in March 2020, EBIT declined sharply into significant negative territory, reaching its lowest points in March and June 2020. This trend indicates a substantial downturn in operational earnings likely influenced by external or internal financial pressures. Although there was a partial recovery with positive EBIT values towards the end of 2021, the level remained inconsistent and again showed a negative figure in early 2022.

Interest Expense

Interest expenses remained relatively stable between 2018 and 2019, fluctuating modestly around the low 40s in millions of US dollars. Starting in March 2020, interest expense increased noticeably, peaking in the third quarter of 2020 before decreasing slightly but still maintaining higher levels than the pre-2020 period. Elevated interest expenses during this timeframe could reflect increased debt levels or unfavorable borrowing terms amid challenging market conditions.

Interest Coverage Ratio

The interest coverage ratio, an indicator of the company's ability to meet interest payments from operating earnings, demonstrated strong values above 3 from 2018 through the end of 2019, suggesting adequate coverage and comfortable debt servicing capability. However, commencing in March 2020, the ratio plunged into negative values corresponding with the negative EBIT figures, signaling that earnings were insufficient to cover interest expenses. The lowest coverage was observed around late 2020. Subsequent quarters showed a gradual improvement, with the ratio moving back into positive territory by early 2022, though still below the levels seen before the downturn.

Overall, the data reflects significant operational and financial strain beginning in early 2020, which impacted profitability and increased the cost burden related to interest expenses. While some recovery signs are visible by 2021 and early 2022, the metrics have not returned to prior levels, indicating ongoing challenges in operational efficiency and financial leverage management.