Norwegian Cruise Line Holdings Ltd (NCLH)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		38.00	34.69	28.69	13.60	20.55
DOH	days	9.61	10.52	12.72	26.83	17.76

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 38.00
= 9.61

The Days of Inventory on Hand (DOH) for Norwegian Cruise Line Holdings Ltd has shown varying trends over the past five years. In December 2020, the company had an inventory turnover cycle of 17.76 days, indicating that it took approximately 17.76 days to sell its inventory.

By December 2021, the DOH increased to 26.83 days, suggesting that the company took longer to sell its inventory, which could be a concern as it may tie up working capital and increase carrying costs. However, there was a notable improvement in inventory management by December 2022, with the DOH decreasing to 12.72 days, indicating a more efficient inventory turnover process.

The trend continued positively with the DOH further decreasing to 10.52 days by December 2023 and reaching 9.61 days by December 2024. These reductions suggest improving efficiency in managing and selling inventory, allowing the company to potentially minimize storage costs and free up cash flow for other investments.

Overall, the decreasing trend in DOH over the years indicates that Norwegian Cruise Line Holdings Ltd has been effectively managing its inventory levels, improving operational efficiency, and potentially enhancing its profitability through better inventory turnover rates.