Enterprise Value (EV)
Current Enterprise Value (EV)
Royal Caribbean Cruises Ltd., current enterprise value calculation
| Current share price (P) | $38.71 |
| No. shares of common stock outstanding | 255,059,197 |
| US$ in thousands | |
| Common equity (market value)1 | 9,873,342) |
| Add: Preferred stock, $0.01 par value; none outstanding (per books) | —) |
| Total equity | 9,873,342) |
| Add: Current portion of long-term debt (per books) | 2,243,131) |
| Add: Commercial paper (per books) | —) |
| Add: Long-term debt, excluding current portion (per books) | 18,847,209) |
| Total equity and debt | 30,963,682) |
| Less: Cash and cash equivalents | 2,701,770) |
| Enterprise value (EV) | 28,261,912) |
Based on: 10-K (reporting date: 2021-12-31).
1 Common equity (market value) = Share price × No. shares of common stock outstanding
= 38.71 × 255,059,197
Historical Enterprise Value (EV)
Royal Caribbean Cruises Ltd., EV calculation
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 Closing price as at the filing date of Royal Caribbean Cruises Ltd. Annual Report.
3 2021 Calculation
Common equity (market value) = Share price × No. shares of common stock outstanding
= 73.67 × 255,002,771
The Enterprise Value (EV) of the entity exhibited significant volatility between 2017 and 2021, characterized by a notable contraction in 2019 followed by a sharp recovery in 2020. While the market valuation of common equity experienced an overall decline during this period, the total Enterprise Value was sustained and eventually increased due to a substantial expansion in the debt component of the capital structure.
- Equity Valuation Trends
- Common equity market value decreased from 27.9 billion US$ in 2017 to 18.8 billion US$ by the end of 2021. A significant trough was observed in 2019, where equity dropped to 18.7 billion US$, followed by a temporary recovery to 22.2 billion US$ in 2020 before declining again in 2021.
- Capital Structure Evolution
- A divergence is evident between total equity and the combined value of equity and debt. Total equity and debt rose from 35.4 billion US$ in 2017 to a peak of 41.5 billion US$ in 2020. The widening gap between common equity and total equity and debt indicates a significant increase in leverage, particularly between 2019 and 2020, where the combined value grew by approximately 11.7 billion US$ despite the volatility in equity.
- Enterprise Value Dynamics
- Enterprise Value followed a pattern similar to the combined equity and debt metric, moving from 35.3 billion US$ in 2017 to 37.2 billion US$ in 2021. The lowest EV was recorded in 2019 at 29.5 billion US$. The subsequent rise to 37.8 billion US$ in 2020 demonstrates that the increase in debt obligations acted as the primary driver for the total valuation of the business operations, offsetting the erosion of market capitalization.
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