Norwegian Cruise Line Holdings Ltd (NCLH)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	9.61	10.52	12.72	26.83	17.76
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	9.61	10.52	12.72	26.83	17.76

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 9.61 + — – —
= 9.61

The cash conversion cycle of Norwegian Cruise Line Holdings Ltd has shown variability over the past five years. In December 2020, the company's cash conversion cycle was 17.76 days, representing the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

In the following year, December 2021, the cash conversion cycle increased to 26.83 days, indicating a lengthier period for the company to realize cash from its operations. However, there was a significant improvement in December 2022, with the cycle decreasing to 12.72 days. This suggests that the company managed its working capital more efficiently during that period.

By December 2023, the cash conversion cycle further decreased to 10.52 days, indicating that the company continued to enhance its efficiency in converting its resources into cash. In the most recent data available, as of December 2024, the cash conversion cycle was 9.61 days, showing a further improvement in the company's ability to generate cash from its operating activities within a shorter timeframe.

Overall, the trend in Norwegian Cruise Line Holdings Ltd's cash conversion cycle over the past five years reflects fluctuations, with periods of both longer and shorter cycles. The company's ability to manage its working capital effectively, as demonstrated by the decreasing cycle durations in recent years, indicates improved efficiency in its operational cash flows.