Nabors Industries Ltd (NBR)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 5,277,960 | 4,729,850 | 5,525,360 | 5,503,430 | 6,760,660 |
| Total stockholders’ equity | US$ in thousands | 326,614 | 368,956 | 590,656 | 1,151,380 | 1,982,810 |
| Financial leverage ratio | 16.16 | 12.82 | 9.35 | 4.78 | 3.41 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $5,277,960K ÷ $326,614K
= 16.16
The financial leverage ratio of Nabors Industries Ltd has shown a consistent increase over the past five years, indicating a rising level of financial leverage. The ratio increased from 3.41 in 2019 to 16.16 in 2023. This suggests that the company has been relying more on debt to finance its operations and growth initiatives over this period.
A higher financial leverage ratio generally implies a higher level of financial risk for the company, as increased debt obligations can lead to higher interest expenses and potentially impact the company's ability to meet its financial obligations in adverse economic conditions.
Investors and stakeholders may closely monitor this trend in financial leverage to assess the company's ability to manage its debt levels effectively and its overall financial health. It would be crucial for the company to balance its debt levels with its profitability and cash flow generation to ensure sustainable growth and stability.
Peer comparison
Dec 31, 2023