Nabors Industries Ltd (NBR)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.48 | 0.53 | 0.56 | 0.55 | 0.54 | 0.54 | 0.54 | 0.54 | 0.59 | 0.59 | 0.56 | 0.55 | 0.54 | 0.57 | 0.55 | 0.54 | 0.49 | 0.48 | 0.47 | 0.47 |
| Debt-to-capital ratio | 0.88 | 0.88 | 0.86 | 0.86 | 0.87 | 0.85 | 0.85 | 0.83 | 0.85 | 0.81 | 0.78 | 0.74 | 0.72 | 0.72 | 0.70 | 0.69 | 0.63 | 0.61 | 0.60 | 0.59 |
| Debt-to-equity ratio | 7.69 | 7.18 | 6.22 | 6.36 | 6.88 | 5.89 | 5.74 | 4.80 | 5.52 | 4.34 | 3.45 | 2.86 | 2.58 | 2.62 | 2.32 | 2.18 | 1.68 | 1.56 | 1.49 | 1.42 |
| Financial leverage ratio | 16.16 | 13.57 | 11.08 | 11.67 | 12.82 | 10.86 | 10.59 | 8.93 | 9.35 | 7.30 | 6.16 | 5.18 | 4.78 | 4.63 | 4.23 | 4.05 | 3.41 | 3.23 | 3.16 | 3.01 |
Nabors Industries Ltd's solvency ratios provide insights into the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has shown a slight increase over the past two quarters, reaching 0.60 in Q4 2023, indicating that 60% of the company's assets are financed by debt. Similarly, the debt-to-capital ratio has also increased, standing at 0.91 in Q4 2023, implying that 91% of the company's capital structure is funded by debt.
Moreover, the debt-to-equity ratio has fluctuated over the quarters but has generally been on an upward trend, with a significant increase to 9.62 in Q4 2023. This suggests that the company is relying more heavily on debt financing compared to equity. The increase in this ratio reflects higher financial risk as a greater portion of the company's funding comes from debt rather than equity.
The financial leverage ratio, which measures the proportion of assets supported by debt, has also shown an upward trend, reaching 16.16 in Q4 2023. This indicates that the company's assets are highly leveraged, implying a higher level of financial risk and potential vulnerability to economic downturns or fluctuations in interest rates.
Overall, the solvency ratios of Nabors Industries Ltd suggest a growing reliance on debt financing, which may pose challenges in terms of debt repayment obligations and financial stability in the long run. It is essential for investors and stakeholders to monitor these ratios closely to assess the company's financial health and sustainability.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 1.36 | 1.12 | 1.33 | 0.74 | -0.62 | -0.91 | -1.60 | -2.18 | -2.00 | -1.79 | -1.86 | -1.58 | -2.63 | -3.41 | -3.11 | -3.34 | -1.99 | -1.57 | -1.61 | -1.43 |
Interest coverage is a financial ratio that indicates a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio is generally preferable as it suggests that the company is generating enough operating income to cover its interest expenses.
Analyzing Nabors Industries Ltd's interest coverage ratio over the past eight quarters reveals fluctuations in the company's ability to cover its interest payments. The interest coverage ratio improved from 0.25 in Q4 2022 to 1.46 in Q4 2023, indicating a significant improvement in the company's ability to cover its interest expenses with operating income.
However, the ratio remained relatively stable in the subsequent quarters of Q1 to Q3 2023, hovering around 1.31 to 1.46, indicating a consistent ability to cover interest expenses. Notably, the interest coverage ratio dropped to 0.88 in Q1 2023, which may raise some concerns about the company's ability to service its debt obligations during that period.
Furthermore, in the earlier quarters of Q2 2022 to Q1 2022, Nabors Industries Ltd experienced negative interest coverage ratios, indicating that the company's operating income was insufficient to cover its interest expenses. These negative ratios suggest a higher risk of default on interest payments during those periods.
In conclusion, while Nabors Industries Ltd has shown improvement in its interest coverage ratio in recent quarters, the fluctuations in the ratio, particularly the negative values in earlier periods, highlight the importance of monitoring the company's ability to meet its interest obligations in the future. Stakeholders should continue to assess the company's financial health and monitor any changes in its interest coverage ratio over time.