Norwegian Cruise Line Holdings Ltd (NCLH)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 8.94 | 8.64 | 9.01 | 9.96 | 10.52 | 11.30 | 10.96 | 11.07 | 12.72 | 15.11 | 19.00 | 24.18 | 26.83 | 35.98 | 39.63 | 34.36 | 17.76 | 12.50 | 9.46 | 8.15 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 8.94 | 8.64 | 9.01 | 9.96 | 10.52 | 11.30 | 10.96 | 11.07 | 12.72 | 15.11 | 19.00 | 24.18 | 26.83 | 35.98 | 39.63 | 34.36 | 17.76 | 12.50 | 9.46 | 8.15 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.94 + — – —
= 8.94
The cash conversion cycle of Norwegian Cruise Line Holdings Ltd has shown fluctuating trends over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle is an important metric that indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 2020 to June 2020, there was a slight increase in the cash conversion cycle, indicating that the company took longer to convert its investments into cash. However, this trend reversed in the following quarters up to December 2021, as the cycle decreased steadily, suggesting an improvement in the efficiency of cash flows.
The company experienced a significant increase in the cash conversion cycle in the first quarter of 2022, followed by a declining trend up to the third quarter of 2024. This fluctuation could be attributed to changes in sales growth, inventory management, or collection periods.
Overall, Norwegian Cruise Line Holdings Ltd managed to decrease its cash conversion cycle from 34.36 days in March 2021 to 8.94 days in December 2024. This implies that the company became more efficient in managing its working capital, which could be a positive sign of improved liquidity and operational efficiency. However, it would be important to analyze the underlying reasons for these changes further to assess the sustainability and effectiveness of the cash conversion cycle management in the long term.
Peer comparison
Dec 31, 2024