Carnival Corporation (CCL)

Carnival Corporation's liquidity ratios have shown a declining trend over the years based on the provided data. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, decreased from 1.22 in November 2020 to 0.29 in November 2024. This indicates a significant reduction in the company's short-term liquidity position.

Similarly, the quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, also declined from 1.13 in November 2020 to 0.15 in November 2024. This suggests that Carnival Corporation may struggle to meet its short-term obligations without relying on inventory sales.

Furthermore, the cash ratio, which reflects the company's ability to cover immediate liabilities with cash and cash equivalents, decreased from 1.10 in November 2020 to 0.10 in November 2024. This indicates a substantial reduction in Carnival Corporation's ability to meet its most pressing obligations solely with cash on hand.

Overall, the declining trend in all three liquidity ratios suggests that Carnival Corporation's short-term liquidity position has weakened over the years, potentially raising concerns about its ability to meet immediate financial obligations efficiently.

---

See also:

Carnival Corporation Liquidity Ratios

---

Additional liquidity measure

The cash conversion cycle of Carnival Corporation has shown fluctuations over the years. As of November 30, 2020, the company's cash conversion cycle was 10.63 days, indicating that Carnival Corporation took approximately 10.63 days to convert its investments in inventory and other resources into cash.

By November 30, 2021, the cash conversion cycle increased to 14.55 days, suggesting that Carnival Corporation took slightly longer to convert its investments into cash compared to the previous year. This may indicate potential challenges in managing working capital efficiently.

Interestingly, by November 30, 2022, Carnival Corporation's cash conversion cycle turned negative, showing a value of -5.65 days. This implies that the company was able to convert its investments into cash more quickly than the time it took to replenish those investments, which can be a positive sign of effective working capital management.

The trend continued in the subsequent years, with the cash conversion cycle remaining negative at -5.87 days as of November 30, 2023, and -5.98 days as of November 30, 2024. A consistently negative cash conversion cycle suggests that Carnival Corporation is efficiently managing its working capital and generating cash flow from its operational activities at a faster rate.

Overall, the fluctuation and subsequent negative values of Carnival Corporation's cash conversion cycle indicate variable efficiency in managing working capital over the years, with recent improvements suggesting better cash flow management and potentially more effective operations in converting investments into cash.