Norwegian Cruise Line Holdings Ltd (NCLH)

Inventory turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cost of revenue (ttm) US$ in thousands 6,112,380 6,126,610 6,070,420 5,787,830 5,468,590 5,366,240 5,122,390 4,812,100 4,267,093 3,765,332 2,966,188 2,142,595 1,608,037 1,097,330 847,731 899,656 1,693,061 2,373,491 3,174,098 3,830,870
Inventory US$ in thousands 149,718 145,056 149,931 157,879 157,646 166,063 153,850 145,948 148,717 155,880 154,397 141,956 118,205 108,177 92,041 84,691 82,381 81,259 82,263 85,516
Inventory turnover 40.83 42.24 40.49 36.66 34.69 32.31 33.29 32.97 28.69 24.16 19.21 15.09 13.60 10.14 9.21 10.62 20.55 29.21 38.58 44.80

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $6,112,380K ÷ $149,718K
= 40.83

The inventory turnover of Norwegian Cruise Line Holdings Ltd has exhibited fluctuations over the period under consideration. Starting at a high of 44.80 in March 2020, the company's inventory turnover gradually decreased to 9.21 by June 2021, indicating a longer time taken to sell its inventory. However, from September 2021 onwards, there was an upward trend in the inventory turnover ratio, reaching 42.24 by September 2024. This suggests the company improved its inventory management efficiency, selling products at a faster rate.

A high inventory turnover ratio, such as the peak of 44.80, indicates strong sales relative to the level of inventory held, which is generally positive as it implies efficient inventory management and faster cash conversion. Conversely, a low turnover ratio, like the values seen in mid-2021, can signal weak sales, overstocking, or obsolete inventory concerns.

Overall, the increasing trend in inventory turnover from 2021 to 2024 indicates that Norwegian Cruise Line Holdings Ltd effectively managed its inventory levels to align with sales demand, which can lead to improved liquidity and profitability. However, ongoing monitoring of this ratio is necessary to ensure inventory levels remain optimized and in line with business operations.