Carnival Corporation (CCL)

Interest coverage

Nov 30, 2024 Aug 31, 2024 May 31, 2024 Feb 29, 2024 Nov 30, 2023 Aug 31, 2023 May 31, 2023 Feb 28, 2023 Nov 30, 2022 Aug 31, 2022 May 31, 2022 Feb 28, 2022 Nov 30, 2021 Aug 31, 2021 May 31, 2021 Feb 28, 2021 Nov 30, 2020 Aug 31, 2020 May 31, 2020 Feb 29, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 3,556,000 3,423,000 2,828,000 2,408,000 2,004,000 423,000 -1,497,000 -3,098,000 -4,471,000 -5,594,000 -7,698,000 -7,860,000 -7,921,000 -7,534,000 -7,643,000 -10,223,000 -9,357,000 -6,981,000 -2,552,000 2,164,000
Interest expense (ttm) US$ in thousands 1,755,000 1,818,000 1,905,000 1,997,000 2,065,000 2,047,000 1,951,000 1,779,000 1,608,000 1,508,000 1,504,000 1,571,000 1,601,000 1,601,000 1,493,000 1,238,000 895,000 596,000 338,000 210,000
Interest coverage 2.03 1.88 1.48 1.21 0.97 0.21 -0.77 -1.74 -2.78 -3.71 -5.12 -5.00 -4.95 -4.71 -5.12 -8.26 -10.45 -11.71 -7.55 10.30

November 30, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,556,000K ÷ $1,755,000K
= 2.03

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses, which may raise concerns about its financial health and ability to meet its debt obligations.

For Carnival Corporation, the interest coverage ratios from February 29, 2020, to May 31, 2022, were consistently negative, indicating that the company was not able to cover its interest expenses with its operating income during this period. These negative ratios suggest a high level of financial distress and may raise red flags for creditors and investors.

However, starting from August 31, 2022, the interest coverage ratio improved and turned positive, indicating that Carnival Corporation's operating income became sufficient to cover its interest expenses. The trend of improving interest coverage ratios from August 31, 2022, to November 30, 2024, suggests that the company's financial situation may be stabilizing and improving.

As of November 30, 2024, Carnival Corporation's interest coverage ratio stood at 2.03, indicating that the company's operating income was more than twice its interest expenses. This improvement in the interest coverage ratio is a positive sign that the company may be in a stronger financial position compared to the earlier periods analyzed.


See also:

Carnival Corporation Interest Coverage (Quarterly Data)