Nabors Industries Ltd (NBR)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.48 | 0.54 | 0.59 | 0.54 | 0.49 |
| Debt-to-capital ratio | 0.88 | 0.87 | 0.85 | 0.72 | 0.63 |
| Debt-to-equity ratio | 7.69 | 6.88 | 5.52 | 2.58 | 1.68 |
| Financial leverage ratio | 16.16 | 12.82 | 9.35 | 4.78 | 3.41 |
Based on the provided solvency ratios for Nabors Industries Ltd for the years 2019 to 2023, we can observe the following trends:
1. Debt-to-assets ratio: This ratio has been gradually increasing from 0.49 in 2019 to 0.60 in 2023, indicating that a higher proportion of the company's assets are being financed by debt over the years.
2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio has been increasing steadily from 0.63 in 2019 to 0.91 in 2023, suggesting that a larger percentage of Nabors Industries' capital structure is comprised of debt.
3. Debt-to-equity ratio: The debt-to-equity ratio has shown a significant increase from 1.68 in 2019 to 9.62 in 2023, indicating a substantial rise in the company's financial leverage and reliance on debt to finance its operations.
4. Financial leverage ratio: The financial leverage ratio has also exhibited an upward trend, increasing from 3.41 in 2019 to 16.16 in 2023, signaling a higher degree of financial risk associated with the company's capital structure.
Overall, the solvency ratios for Nabors Industries Ltd demonstrate a growing dependence on debt financing over the years, which may indicate an elevated level of financial risk and potential challenges in meeting debt obligations in the future. It is important for investors and stakeholders to closely monitor these trends and assess the company's ability to manage its debt levels effectively.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.36 | -0.62 | -2.00 | -2.63 | -1.99 |
The interest coverage ratio for Nabors Industries Ltd has shown a fluctuating trend over the past five years. In 2019 and 2020, the company had negative interest coverage ratios, indicating that the company's operating income was insufficient to cover its interest expenses during those years. This raised concerns about the company's ability to meet its debt obligations solely from operating income.
However, there was a significant improvement in 2021 and 2022, with the interest coverage ratio turning positive. This suggests that the company's operating income increased sufficiently to cover its interest expenses in those years. The most recent data for 2023 shows a further improvement in interest coverage, although it remains relatively low at 1.46.
Overall, while there has been improvement in Nabors Industries Ltd's ability to cover its interest expenses in recent years, the interest coverage ratio still remains relatively low. It would be advisable for the company to continue monitoring and working towards further strengthening its financial position to ensure sustainable debt repayment capabilities.