Carnival Corporation (CCL)
Solvency ratios
| 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 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.57 | 0.58 | 0.59 | 0.62 | 0.63 | 0.62 | 0.55 | 0.55 | 0.56 | 0.53 | 0.50 | 0.47 | 0.46 | 0.41 | 0.37 | 0.30 | 0.21 | 0.21 | 0.20 | 0.20 |
| Debt-to-capital ratio | 0.81 | 0.81 | 0.81 | 0.84 | 0.84 | 0.82 | 0.77 | 0.78 | 0.74 | 0.70 | 0.64 | 0.59 | 0.57 | 0.52 | 0.49 | 0.42 | 0.29 | 0.28 | 0.26 | 0.27 |
| Debt-to-equity ratio | 4.27 | 4.14 | 4.24 | 5.44 | 5.30 | 4.52 | 3.40 | 3.54 | 2.90 | 2.35 | 1.81 | 1.45 | 1.34 | 1.08 | 0.97 | 0.71 | 0.40 | 0.38 | 0.35 | 0.38 |
| Financial leverage ratio | 7.45 | 7.14 | 7.15 | 8.84 | 8.43 | 7.32 | 6.20 | 6.42 | 5.17 | 4.39 | 3.60 | 3.08 | 2.89 | 2.61 | 2.61 | 2.39 | 1.93 | 1.78 | 1.74 | 1.85 |
The solvency ratios of Carnival Corporation indicate the company's ability to meet its long-term financial obligations and the extent to which it relies on debt for funding its operations. Over the reporting periods, the debt-to-assets ratio has shown a fluctuating trend, ranging from 0.20 to 0.63, with a recent decrease to 0.57 as of Feb 29, 2024. This ratio suggests that around 57% of the company's total assets are financed by debt.
The debt-to-capital ratio, indicating the proportion of debt in the company's capital structure, has also displayed variability, ranging from 0.26 to 0.84. As of Feb 29, 2024, this ratio stands at 0.81, indicating that debt comprises approximately 81% of the company's total capital.
The debt-to-equity ratio, which assesses the level of debt relative to shareholders' equity, shows a similar pattern of fluctuations, varying from 0.35 to 5.44. Currently, the ratio is at 4.27 as of Feb 29, 2024, implying that the company has a higher level of debt relative to shareholders' equity.
Lastly, the financial leverage ratio, measuring the company's total assets relative to shareholders' equity, has seen fluctuations between 1.74 and 8.84, with the latest figure at 7.45 as of Feb 29, 2024. This high ratio suggests that the company has a significant reliance on debt to finance its operations and investments.
Overall, the solvency ratios of Carnival Corporation indicate a fluctuating but significant level of debt in its capital structure, highlighting the importance of monitoring the company's ability to manage and service its debt obligations amidst changing market conditions.
Coverage ratios
| 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 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 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 | 15.86 | 16.35 | 16.16 |
The interest coverage ratio for Carnival Corporation has shown fluctuating and concerning trends over the past few quarters. The ratio indicates the company's ability to pay its interest expenses from its operating income. A ratio below 1 suggests that the company is not generating enough operating income to cover its interest expenses, which can be a red flag for creditors and investors.
Looking at the data provided, we can observe that the interest coverage ratio has been consistently below 1 since May 2021, indicating that Carnival Corporation has been struggling to cover its interest expenses with its operating income. This raises concerns about the company's financial health and ability to service its debt obligations.
The sharp decline in the interest coverage ratio from positive levels in early 2020 to significantly negative levels in recent quarters is a worrying trend. This could be attributed to the impact of the COVID-19 pandemic on the travel and leisure industry, which Carnival Corporation operates in. The sharp decrease in revenues and operating income during the pandemic may have exacerbated the company's ability to cover its interest expenses.
Investors and creditors should closely monitor Carnival Corporation's financial performance and management's efforts to improve the interest coverage ratio. It will be crucial for the company to focus on increasing its operating income and managing its debt levels to enhance its financial stability and sustainably cover its interest obligations in the future.