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.