Nabors Industries Ltd (NBR)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 2,511,520 | 2,537,540 | 3,262,800 | 2,968,700 | 3,333,220 |
| Total stockholders’ equity | US$ in thousands | 326,614 | 368,956 | 590,656 | 1,151,380 | 1,982,810 |
| Debt-to-capital ratio | 0.88 | 0.87 | 0.85 | 0.72 | 0.63 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $2,511,520K ÷ ($2,511,520K + $326,614K)
= 0.88
The debt-to-capital ratio of Nabors Industries Ltd has been increasing over the past five years, indicating a higher level of reliance on debt financing relative to total capital. In 2019, the ratio was 0.63, which means that 63% of the company's capital structure was comprised of debt. This ratio has steadily climbed to 0.91 in 2023, showing a significant rise in debt utilization in the capital structure.
The increasing trend in the debt-to-capital ratio may raise concerns about the company's financial leverage and ability to manage debt obligations effectively. A higher ratio implies a higher risk for the company, especially in terms of interest payments and potential financial distress.
It is essential for investors and stakeholders to closely monitor Nabors Industries Ltd's debt levels and financial health to ensure the company's ability to meet its debt obligations and sustain long-term profitability.
Peer comparison
Dec 31, 2023