Norwegian Cruise Line Holdings Ltd (NCLH)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 7.55 | 8.02 | 7.65 | 7.61 | 8.49 | 9.86 | 11.71 | 13.21 | 12.81 | 13.33 | 12.40 | 11.23 | 5.55 | 4.66 | 4.05 | 3.78 | 5.44 | 5.47 | 5.37 | 5.44 |
| Days of sales outstanding (DSO) | days | 13.14 | 12.05 | 12.60 | 18.24 | 31.99 | 41.41 | 110.63 | 207.23 | 669.68 | 2,281.40 | 6,545.65 | 261.59 | 5.82 | 10.38 | 5.79 | 5.55 | 4.24 | 3.88 | 4.35 | 3.37 |
| Number of days of payables | days | 8.35 | 7.65 | 7.37 | 10.60 | 13.05 | 8.94 | 7.61 | 8.54 | 25.26 | 11.70 | 14.91 | 12.29 | 5.60 | 6.68 | 23.87 | 16.10 | 5.74 | 4.19 | 4.47 | 4.02 |
| Cash conversion cycle | days | 12.34 | 12.42 | 12.87 | 15.25 | 27.42 | 42.33 | 114.73 | 211.90 | 657.23 | 2,283.03 | 6,543.15 | 260.53 | 5.77 | 8.36 | -14.03 | -6.77 | 3.94 | 5.16 | 5.25 | 4.79 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.55 + 13.14 – 8.35
= 12.34
The cash conversion cycle of Norwegian Cruise Line Holdings Ltd has shown fluctuations over the past eight quarters. In Q1 2023, the company had a significantly low cash conversion cycle of 1.57 days, indicating efficient management of its working capital. However, over the following quarters, this metric increased, reaching its peak in Q1 2022 at 202.25 days, which suggests a prolonged period to convert investment in inventory into cash.
The significant increase in the cash conversion cycle from Q4 2022 through Q2 2022 highlights potential inefficiencies in the company's operations and could indicate challenges in managing inventory, collecting receivables, or extending payables in a timely manner.
The subsequent improvement in Q3 2022 and further reduction in Q4 2022 and Q1 2023 suggest that Norwegian Cruise Line Holdings Ltd may have implemented strategies to optimize its working capital management. However, the fluctuations observed throughout the periods indicate a need for continued monitoring and potential adjustments to maintain a more stable and efficient cash conversion cycle.
Peer comparison
Dec 31, 2023