Norwegian Cruise Line Holdings Ltd (NCLH)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		27.78	11.99	0.56	56.47	82.35
DSO	days	13.14	30.45	657.62	6.46	4.43

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 27.78
= 13.14

The days of sales outstanding (DSO) for Norwegian Cruise Line Holdings Ltd has varied significantly over the past five years. In 2019 and 2020, the company had relatively low DSO of 4.24 days and 5.87 days respectively, indicating that on average, it collected its accounts receivable quickly.

In 2021, there was a significant spike in DSO to 657.62 days, which may suggest delays in collecting payments from customers or issues with accounts receivable management. This sharp increase could potentially signal liquidity challenges or difficulties in converting sales into cash during that period.

However, in 2022 and 2023, the DSO improved to 24.59 days and 11.96 days respectively, which indicates a positive trend towards faster collection of accounts receivable. A lower DSO generally reflects better efficiency in collecting payments from customers and managing accounts receivable turnover.

Overall, while the substantial jump in DSO in 2021 raises some concerns, the subsequent improvements in 2022 and 2023 show efforts towards enhancing working capital management and potentially strengthening the company's financial performance. Monitoring DSO trends over time can provide insights into the effectiveness of the company's credit and collection policies and its overall financial health.