Norwegian Cruise Line Holdings Ltd (NCLH)

Norwegian Cruise Line Holdings Ltd's solvency ratios indicate the company's ability to meet its financial obligations and manage its debt levels over the years.

The debt-to-assets ratio has shown a general increasing trend from 2019 to 2023, from 0.41 to 0.72. This suggests that the company has been relying more on debt to finance its assets, which could potentially increase financial risk.

The debt-to-capital ratio has also been on the rise, increasing from 0.51 in 2019 to 0.98 in 2023. This ratio indicates the proportion of the company's capital that is comprised of debt, and the upward trend suggests a higher reliance on debt financing over the years.

The debt-to-equity ratio has fluctuated significantly, with a notable spike in 2022 to 198.59 before decreasing to 46.74 in 2023. This indicates that the company's debt levels relative to its equity have been volatile, potentially reflecting changes in capital structure and financial leverage.

The financial leverage ratio has followed a similar pattern, peaking in 2022 at 270.56 before declining to 64.80 in 2023. This ratio indicates the extent to which the company's operations are financed by debt, and the decrease in 2023 suggests a lower reliance on debt compared to the previous year.

Overall, Norwegian Cruise Line Holdings Ltd's solvency ratios show a mixed picture of increasing debt ratios in recent years, which could indicate a higher level of financial risk and leverage. It is essential for investors and stakeholders to closely monitor these ratios to assess the company's debt management and financial stability.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet interest payments on its outstanding debt. A higher interest coverage ratio indicates that the company is better able to meet its interest obligations.

Based on the data provided, Norwegian Cruise Line Holdings Ltd has faced fluctuating interest coverage ratios over the past five years. In 2023, the interest coverage ratio improved to 1.28, indicating a slight increase in the company's ability to cover its interest expenses compared to the previous year. However, it is still relatively low, suggesting that the company may have limited earnings to cover its interest payments.

In contrast, in 2022, the interest coverage ratio was negative at -1.94, indicating that the company's earnings were insufficient to cover its interest expenses. This was also the case in 2021 and 2020, with negative interest coverage ratios of -1.23 and -3.89, respectively, reflecting significant challenges in meeting interest payments during those years.

The most favorable interest coverage ratio in the past five years was in 2019 at 4.32, indicating a strong ability to cover interest expenses that year.

Overall, Norwegian Cruise Line Holdings Ltd's interest coverage has been volatile, with periods of both strong and weak coverage. Investors and creditors may view the fluctuating interest coverage ratio as a potential risk factor when evaluating the company's ability to manage its debt obligations.