Carnival Corporation (CCL)
Activity ratios
Short-term
Turnover ratios
| Nov 30, 2024 | Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 30.84 | 27.12 | 27.47 | 13.91 | 24.42 |
| Receivables turnover | 42.28 | 34.94 | 26.73 | 7.76 | 15.52 |
| Payables turnover | 13.80 | 12.26 | 11.20 | 6.21 | 13.11 |
| Working capital turnover | — | — | — | — | 2.26 |
Carnival Corporation's activity ratios provide insights into how efficiently the company manages its operating assets and liabilities.
1. Inventory Turnover: Carnival's inventory turnover has fluctuated over the years, ranging from 13.91 to 30.84. A higher inventory turnover indicates that Carnival is selling its inventory more quickly, which is generally positive as it reduces the risk of obsolete inventory. The latest ratio of 30.84 suggests that the company has been more effective in managing its inventory in 2024 compared to earlier years.
2. Receivables Turnover: The receivables turnover ratio has shown an increasing trend from 7.76 in 2021 to 42.28 in 2024. This indicates that Carnival has been able to collect payments from customers at a faster pace. A higher receivables turnover ratio suggests that Carnival is efficiently managing its accounts receivable and credit policies, which could improve cash flow and reduce credit risk.
3. Payables Turnover: Carnival's payables turnover ratios have also shown an increasing trend, from 6.21 in 2021 to 13.80 in 2024. A higher payables turnover ratio indicates that the company is paying its suppliers more quickly. While this may imply strong relationships with suppliers, it could also suggest potential cash flow challenges if payments are made too rapidly.
4. Working Capital Turnover: The working capital turnover ratio for Carnival is not available for the years after 2020. This may suggest that the company's working capital management is not as easily quantifiable or that there have been changes in reporting practices. Working capital turnover measures how efficiently Carnival is using its working capital to generate sales. A higher ratio would indicate more effective utilization of resources.
In conclusion, Carnival Corporation's activity ratios suggest improvements in inventory turnover, receivables turnover, and payables turnover over the years, reflecting efforts to enhance operational efficiency and financial performance. Further analysis and comparisons with industry benchmarks could provide deeper insights into Carnival's liquidity and working capital management strategies.
Average number of days
| Nov 30, 2024 | Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 11.83 | 13.46 | 13.29 | 26.24 | 14.94 |
| Days of sales outstanding (DSO) | days | 8.63 | 10.45 | 13.66 | 47.06 | 23.52 |
| Number of days of payables | days | 26.44 | 29.78 | 32.60 | 58.74 | 27.84 |
To analyze Carnival Corporation's activity ratios, we will focus on Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables. These ratios provide insight into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH):
- DOH decreased from 14.94 days in November 2020 to 11.83 days in November 2024.
- This indicates that the company is managing its inventory more efficiently over time, holding less inventory on hand before selling it.
2. Days of Sales Outstanding (DSO):
- DSO shows a decrease from 23.52 days in November 2020 to 8.63 days in November 2024.
- The declining trend signifies that Carnival Corporation is collecting receivables more quickly, which is favorable for cash flow.
3. Number of Days of Payables:
- The Number of Days of Payables increased from 27.84 days in November 2020 to 26.44 days in November 2024.
- Although the trend is not significant, a lower value indicates that the company is paying its suppliers more promptly.
Overall, the decreasing trend in DOH and DSO, along with a relatively stable trend in the Number of Days of Payables, suggests that Carnival Corporation has been effectively managing its working capital and improving its operating efficiency over the analyzed period.
See also:
Long-term
| Nov 30, 2024 | Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.60 | 0.48 | 0.27 | 0.05 | 0.11 |
| Total asset turnover | 0.51 | 0.40 | 0.20 | 0.04 | 0.08 |
The fixed asset turnover ratio for Carnival Corporation has displayed a fluctuating trend over the past five years. It decreased from 0.11 in November 30, 2020, to 0.05 in November 30, 2021, indicating a decline in the company's efficiency in generating sales from its fixed assets. However, there was a notable increase in this ratio in the subsequent years, reaching 0.60 by November 30, 2024. This suggests that the company was able to improve its utilization of fixed assets to generate revenue more efficiently over time.
On the other hand, the total asset turnover ratio for Carnival Corporation also exhibited variability during the same period. It declined from 0.08 in November 30, 2020, to 0.04 in November 30, 2021, reflecting a reduction in the company's overall asset utilization efficiency. However, similar to the fixed asset turnover ratio, the total asset turnover ratio showed an upward trend in the following years, reaching 0.51 by November 30, 2024. This increase indicates that Carnival Corporation was able to enhance its ability to generate sales from its total assets as of the latest reporting period.
Overall, the improvement in both the fixed asset turnover and total asset turnover ratios for Carnival Corporation suggests a positive trend in the company's long-term activity efficiency and effectiveness in utilizing its assets to drive revenue generation.