Carnival Corporation (CCL)

Cash ratio

		Nov 30, 2023	Nov 30, 2022	Nov 30, 2021	Nov 30, 2020	Nov 30, 2019
Cash and cash equivalents	US$ in thousands	2,415,000	4,029,000	8,939,000	9,513,000	518,000
Short-term investments	US$ in thousands	2,985,000	0	200,000	0	—
Total current liabilities	US$ in thousands	11,481,000	10,605,000	10,408,000	8,686,000	9,127,000
Cash ratio		0.47	0.38	0.88	1.10	0.06

November 30, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($2,415,000K + $2,985,000K) ÷ $11,481,000K
= 0.47

The cash ratio measures a company's ability to cover its short-term liabilities with its cash and cash equivalents. For Carnival Corp., the cash ratio has fluctuated over the past five years. In 2023, the cash ratio was 0.36, indicating that the company had $0.36 in cash and cash equivalents for every $1 of current liabilities. This represents a decrease from the previous year's ratio of 0.44. In 2021 and 2022, the company's cash ratio was 0.92 and 1.15, respectively, displaying a strong ability to cover its short-term obligations with cash. However, in 2019, the ratio was 0.13, signaling a relatively low ability to cover short-term liabilities with cash. It is important to note that a higher cash ratio is generally preferred as it implies a greater ability to meet short-term obligations without relying on external sources of funding. The downward trend in Carnival Corp.'s cash ratio over the past two years may indicate a need for the company to closely monitor its liquidity position and assess its ability to meet short-term obligations efficiently.