Norwegian Cruise Debt
| NCLH Stock | USD 26.92 0.26 0.96% |
As of now, Norwegian Cruise's Short and Long Term Debt is increasing as compared to previous years. The Norwegian Cruise's current Debt To Equity is estimated to increase to 49.07, while Long Term Debt is projected to decrease to under 7.4 B. With a high degree of financial leverage come high-interest payments, which usually reduce Norwegian Cruise's Earnings Per Share (EPS).
Debt Ratio | First Reported 2010-12-31 | Previous Quarter 0.72122979 | Current Value 0.44 | Quarterly Volatility 0.10585722 |
Given that Norwegian Cruise's debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Norwegian Cruise is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Norwegian Cruise to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Norwegian Cruise is said to be less leveraged. If creditors hold a majority of Norwegian Cruise's assets, the Company is said to be highly leveraged.
As of now, Norwegian Cruise's Total Current Liabilities is increasing as compared to previous years. The Norwegian Cruise's current Non Current Liabilities Total is estimated to increase to about 13.8 B, while Liabilities And Stockholders Equity is projected to decrease to under 11.5 B. Norwegian |
Norwegian Cruise Bond Ratings
Norwegian Cruise Line financial ratings play a critical role in determining how much Norwegian Cruise have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Norwegian Cruise's borrowing costs.| Piotroski F Score | 7 | Strong | View |
| Beneish M Score | (3.16) | Unlikely Manipulator | View |
Norwegian Cruise Line Debt to Cash Allocation
As Norwegian Cruise Line follows its natural business cycle, the capital allocation decisions will not magically go away. Norwegian Cruise's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors.
Norwegian Cruise Line currently holds 14.73 B in liabilities. Norwegian Cruise Line has a current ratio of 0.45, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Note, when we think about Norwegian Cruise's use of debt, we should always consider it together with its cash and equity.Norwegian Cruise Total Assets Over Time
Norwegian Cruise Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Norwegian Cruise uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.Norwegian Cruise Debt Ratio | 44.0 |
Norwegian Cruise Corporate Bonds Issued
Most Norwegian bonds can be classified according to their maturity, which is the date when Norwegian Cruise Line has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Norwegian Short Long Term Debt Total
Short Long Term Debt Total |
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Understaning Norwegian Cruise Use of Financial Leverage
Understanding the composition and structure of Norwegian Cruise's debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of Norwegian Cruise's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 14.7 B | 15.5 B | |
| Net Debt | 14.3 B | 15 B | |
| Short Term Debt | 1.8 B | 1.9 B | |
| Long Term Debt | 12.3 B | 7.4 B | |
| Long Term Debt Total | 13.3 B | 8 B | |
| Short and Long Term Debt | 1.7 B | 1.8 B | |
| Net Debt To EBITDA | 8.17 | 7.55 | |
| Debt To Equity | 46.74 | 49.07 | |
| Interest Debt Per Share | 34.84 | 19.25 | |
| Debt To Assets | 0.72 | 0.44 | |
| Long Term Debt To Capitalization | 0.98 | 0.51 | |
| Total Debt To Capitalization | 0.98 | 0.52 | |
| Debt Equity Ratio | 46.74 | 49.07 | |
| Debt Ratio | 0.72 | 0.44 | |
| Cash Flow To Debt Ratio | 0.14 | 0.07 |
Currently Active Assets on Macroaxis
When determining whether Norwegian Cruise Line offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Norwegian Cruise's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Norwegian Cruise Line Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Norwegian Cruise Line Stock:Check out the analysis of Norwegian Cruise Fundamentals Over Time. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Is Hotels, Resorts & Cruise Lines space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Norwegian Cruise. If investors know Norwegian will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Norwegian Cruise listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.34 | Earnings Share 1.14 | Revenue Per Share 21.674 | Quarterly Revenue Growth 0.107 | Return On Assets 0.044 |
The market value of Norwegian Cruise Line is measured differently than its book value, which is the value of Norwegian that is recorded on the company's balance sheet. Investors also form their own opinion of Norwegian Cruise's value that differs from its market value or its book value, called intrinsic value, which is Norwegian Cruise's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Norwegian Cruise's market value can be influenced by many factors that don't directly affect Norwegian Cruise's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Norwegian Cruise's value and its price as these two are different measures arrived at by different means. Investors typically determine if Norwegian Cruise is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Norwegian Cruise's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.