Norwegian Cruise Line Holdings Ltd (NCLH)

Debt-to-equity ratio

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
Long-term debt US$ in thousands 13,500,000 12,700,000 12,200,000 11,900,000 11,900,000 12,000,000 11,600,000 13,100,000 12,500,000 14,200,000 14,200,000 13,911,700 14,200,000 12,022,100 11,142,800 8,595,300 6,957,800 6,417,100 6,471,100 6,686,100
Total stockholders’ equity US$ in thousands 300,807 438,688 15,221 -99,548 68,591 399,783 901,815 1,507,600 2,432,650 2,883,240 3,719,250 4,377,260 4,354,100 4,087,770 4,337,020 4,374,650 6,515,580 6,273,420 6,150,340 5,905,300
Debt-to-equity ratio 44.88 28.95 801.52 — 173.49 30.02 12.86 8.69 5.14 4.93 3.82 3.18 3.26 2.94 2.57 1.96 1.07 1.02 1.05 1.13

December 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $13,500,000K ÷ $300,807K
= 44.88

The debt-to-equity ratio of Norwegian Cruise Line Holdings Ltd has shown significant fluctuations over the past 8 quarters, ranging from a low of 9.00 in Q1 2022 to a high of 861.99 in Q2 2023. In Q4 2023, the ratio stood at 46.74, reflecting an increase from the previous quarter.

The sudden spike in the debt-to-equity ratio in Q2 2023 to 861.99 raises concerns about the company's leverage and the proportion of debt used to finance its operations compared to shareholder equity. It is important to note that such a high ratio can indicate a potential risk of financial distress and may signal that the company is heavily reliant on debt to support its business activities.

On the other hand, the relatively lower ratios observed in previous quarters, such as Q1 2022 (9.00) and Q3 2022 (14.69), suggest a more conservative capital structure with lower levels of debt compared to equity. This can be viewed positively as it indicates a lower financial risk and a stronger financial position.

In conclusion, the debt-to-equity ratio of Norwegian Cruise Line Holdings Ltd has displayed fluctuating trends, with the recent surge in Q2 2023 raising red flags about the company's debt levels. Further monitoring of the ratio's trajectory will be crucial to assess the company's financial health and its ability to manage its debt obligations effectively.