Nabors Industries Ltd (NBR)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.56 | 0.48 | 0.54 | 0.59 | 0.54 |
| Debt-to-capital ratio | 0.95 | 0.88 | 0.87 | 0.85 | 0.72 |
| Debt-to-equity ratio | 18.56 | 7.69 | 6.88 | 5.52 | 2.58 |
| Financial leverage ratio | 33.37 | 16.16 | 12.82 | 9.35 | 4.78 |
Nabors Industries Ltd's solvency ratios show fluctuations over the years, indicating changes in the company's financial leverage and ability to meet its long-term obligations.
1. Debt-to-assets ratio has shown some variability, ranging from 0.48 to 0.59, with a slight decrease from 2023 to 2024. This ratio suggests that a significant portion of the company's assets is financed by debt.
2. Debt-to-capital ratio has been on an upward trend, increasing from 0.72 in 2020 to 0.95 in 2024. This indicates that a higher proportion of the company's capital structure is made up of debt over the years.
3. Debt-to-equity ratio has shown substantial growth, rising from 2.58 in 2020 to 18.56 in 2024. This indicates that the company has significantly high levels of debt relative to its equity, which may raise concerns about financial risk.
4. Financial leverage ratio has also experienced significant growth, increasing from 4.78 in 2020 to 33.37 in 2024. This indicates that the company's reliance on debt to finance its operations has increased substantially, potentially leading to higher financial risk.
Overall, the increasing trend in these solvency ratios suggests a rising financial risk for Nabors Industries Ltd as it becomes more leveraged over time. Investors and creditors may need to closely monitor the company's debt levels and its ability to meet its long-term obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.18 | 1.36 | -0.62 | -2.00 | -2.63 |
The interest coverage ratio for Nabors Industries Ltd has shown a concerning trend over the past few years. In December 31, 2020, the ratio was at -2.63, suggesting that the company's operating income was insufficient to cover its interest expenses. This negative ratio continued to deteriorate in 2021 to -2.00 and in 2022 to -0.62, indicating a worsening financial position in terms of meeting interest obligations.
However, there was a slight improvement in December 31, 2023, with the interest coverage ratio increasing to 1.36. This suggests that the company's operating income was finally able to cover its interest expenses, albeit with a narrow margin. In December 31, 2024, the ratio further improved to 1.18, indicating a continued positive trend in the company's ability to meet its interest payments.
Overall, while there has been some recent improvement in Nabors Industries Ltd's interest coverage ratio, it is essential for the company to sustain this positive trend to ensure financial stability and mitigate risks associated with meeting interest obligations.