Carnival Corp. & plc (NYSE:CCL)

Total Asset Turnover

The reported and adjusted total asset turnover ratios show a significant decline from 0.45-0.46 in 2018-2019 to a low point of 0.04 in 2021, indicating a substantial decrease in asset efficiency during this period. From 2022 onwards, there is a noticeable recovery back to 0.44 by 2023, suggesting a return to pre-2019 levels of asset utilization.

Debt to Equity

Both reported and adjusted debt to equity ratios reveal a sharp upward trend starting in 2020. The ratio rose from a moderate 0.42-0.45 in 2018-2019 to a peak of approximately 5.08 adjusted in 2022, indicating a significant increase in leverage and reliance on debt financing. By 2023, a slight reduction is seen, though the ratio remains considerably elevated at around 4.44-4.63.

Debt to Capital

Debt to capital ratios increased steadily from about 0.30 in 2018 to a high of approximately 0.84 adjusted in 2022, reflecting growing debt as a proportion of the company’s capital base. In 2023, this ratio stabilized slightly at 0.82, maintaining a high level of debt dependency.

Financial Leverage

There is a marked increase in financial leverage from relatively low levels of around 1.73-1.78 in 2018-2019 to a peak of 7.32 in 2022. This suggests that the company has progressively amplified its use of debt relative to equity. The leverage ratio dipped slightly to 7.14 in 2023 but remains substantially elevated compared to the pre-2020 period.

Net Profit Margin

The net profit margin shows a dramatic deterioration starting in 2020, shifting from positive margins near 15-16% to extreme negative values, reaching nearly -500% in 2021. While the margin improves from this nadir, it remains negative through 2023, indicating ongoing operational challenges and unprofitability despite some recovery.

Return on Equity (ROE)

The ROE follows a similar trajectory to profitability metrics, decreasing sharply from around 12-13% in 2018-2019 to profoundly negative figures in excess of -70% starting in 2020. Although there is a slight improvement by 2023, ROE remains close to zero and negative, reflecting sustained shareholder value erosion.

Return on Assets (ROA)

The ROA echoes the trends observed in ROE and profit margin, switching from positive values near 7% in 2018-2019 to markedly negative returns from 2020 onwards. Although negative ROA values moderate gradually after 2021, they remain below zero by 2023, indicating continued inefficiency in asset utilization to generate profit.

The financial data reveals substantial fluctuations in the company's performance and asset utilization over the six-year period. Revenues exhibit a marked decline starting in the fiscal year ending November 30, 2020, reaching a trough in 2021 before showing a strong recovery in subsequent years. Total revenues decreased sharply from a high of $20,825 million in 2019 to $1,908 million in 2021, then rose significantly to $21,593 million by 2023, nearly reaching pre-decline levels.

Total assets increased gradually from 2018 through 2020, peaking at $53,593 million, followed by a slight decrease each year thereafter, ending at $49,120 million in 2023. This trend suggests some asset devaluation or divestiture occurring after 2020, although overall asset levels remain relatively stable compared to the significant revenue volatility.

The reported total asset turnover ratio, which measures how efficiently the company utilizes assets to generate revenue, mirrors the revenue trends with a sharp decline in 2020 and 2021, falling from 0.46 in 2019 to 0.04 in 2021. This indicates a substantial drop in asset efficiency during that period. The ratio improves markedly in 2022 and 2023, rising back to 0.44, aligning closely with the highest prior levels.

The adjusted total assets and the adjusted total asset turnover ratio display patterns consistent with their reported counterparts, reinforcing the observations made regarding asset levels and turnover. Both adjusted metrics confirm the decline in asset turnover efficiency during 2020 and 2021 and the subsequent recovery by 2023.

Revenue Trends

Steep decline from 2019 to 2021, followed by a strong rebound through 2023.

Total Assets

Gradual increase until 2020, followed by a moderate decrease, indicating some reduction in asset base post-peak.

Asset Turnover Ratios

Significant reduction in 2020-2021, reflecting decreased efficiency in asset utilization, with recovery to near-2019 levels by 2023.

Overall, the data suggests a period of substantial operational and financial disruption around 2020 and 2021, with impaired revenue generation and asset utilization efficiency. However, the subsequent years show a clear recovery and return to previous performance levels, suggesting effective management responses and stabilization of key financial metrics.

The financial data reveals a significant shift in the company's capital structure over the analyzed period. From 2018 to 2023, total debt demonstrated a marked increase, rising from approximately $10.3 billion to over $30.5 billion. This upward trend peaked in 2022 at around $34.5 billion before exhibiting a slight decline in 2023.

Conversely, shareholders’ equity displayed a downward trajectory throughout the same timeframe. Beginning at approximately $24.4 billion in 2018, equity steadily decreased to about $6.9 billion by 2023. This reduction in equity, coupled with rising debt, indicates a notable change in leverage.

Analysis of reported debt to equity ratios supports this observation. The ratio increased from a low of 0.42 in 2018 to a high of 4.89 in 2022, signifying that debt levels increasingly overshadowed shareholders' equity. Although the ratio slightly decreased to 4.44 in 2023, the overall trend points to higher financial leverage and potential risk exposure associated with increased debt reliance.

Similarly, adjusted total debt followed a pattern consistent with reported total debt, rising from about $10.7 billion in 2018 to a peak near $35.9 billion in 2022, before declining to roughly $31.9 billion in 2023. The adjusted debt to equity ratio also tracked closely with the reported ratio, starting at 0.44 in 2018, climbing sharply to 5.08 in 2022, and slightly retreating to 4.63 in 2023.

In summary, the data illustrate a considerable increase in the company's leverage over the six-year span, driven primarily by growing debt levels and shrinking equity. The peak leverage ratios in 2022 may suggest heightened financial risk during that period, although a modest reduction in debt and leverage in 2023 could indicate initial steps towards rebalancing the capital structure.

Total Debt

Increased from $10.3 billion in 2018 to $30.6 billion in 2023, with a peak in 2022.

Shareholders’ Equity

Declined significantly from $24.4 billion in 2018 to $6.9 billion in 2023.

Debt to Equity Ratios

Reported ratio escalated from 0.42 to 4.44; adjusted ratio similarly increased from 0.44 to 4.63, both peaking in 2022.

Total Debt

The total debt showed a marked increase from 10,323 million USD in 2018 to a peak of 34,546 million USD in 2022. However, in 2023, there was a reduction to 30,572 million USD, indicating a slight deleveraging after several years of rising debt levels.

Total Capital

Total capital increased steadily from 34,766 million USD in 2018, reaching its highest level in 2020 at 47,511 million USD. Following this peak, total capital declined consistently over the next three years, dropping to 37,454 million USD by 2023.

Reported Debt to Capital Ratio

The reported debt to capital ratio rose significantly over the period, from 0.30 in 2018 to 0.83 in 2022, reflecting increased leveraging within the capital structure. In 2023, this ratio stabilized slightly at 0.82, consistent with the decline in total debt and capital.

Adjusted Total Debt

Adjusted total debt follows the same general trend as reported total debt but at slightly higher levels each year. It increased from 10,686 million USD in 2018 to a maximum of 35,881 million USD in 2022 before decreasing to 31,891 million USD in 2023. This indicates that adjustments to total debt reveal consistently higher obligations than the reported measures.

Adjusted Total Capital

The adjusted total capital rose from 35,129 million USD in 2018 to 48,935 million USD in 2020, then steadily declined over subsequent years to 38,773 million USD in 2023. This decline aligns with the reduction observed in total capital, with adjustments showing slightly higher capital values each year.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio demonstrates a similar pattern to the reported ratio. It increased substantially from 0.30 in 2018 to a high of 0.84 in 2022, before easing marginally to 0.82 in 2023. The elevated ratios highlight a considerable increase in leveraging over the assessment period, stabilizing at a high level in the most recent year.

Total Assets

Total assets increased steadily from 42,401 million US dollars in 2018 to a peak of 53,593 million in 2020, indicating asset growth over these years. From 2020 onwards, total assets slightly declined each year, reaching 49,120 million in 2023. This suggests a moderate reduction in asset base after 2020.

Shareholders’ Equity

Shareholders’ equity rose modestly from 24,443 million US dollars in 2018 to a maximum of 25,365 million in 2019. However, it then experienced a significant decline in subsequent years, dropping sharply to 20,555 million in 2020, and continuing down to a low of 6,882 million in 2023. This downward trend indicates a substantial erosion of equity capital over the period.

Reported Financial Leverage

Reported financial leverage increased considerably from 1.73 in 2018 to 2.61 in 2020, then escalated dramatically to 7.32 in 2022, marginally decreasing to 7.14 in 2023. This sharply rising leverage ratio corresponds with the decline in shareholders’ equity and suggests growing reliance on debt or liabilities relative to equity.

Adjusted Total Assets

The adjusted total assets closely mirror the pattern of total assets, showing growth up to 2020 followed by a gradual decrease through 2023. This confirms the consistency of asset valuation adjustments with the reported data.

Adjusted Financial Leverage

Adjusted financial leverage follows the same pattern as reported financial leverage, increasing steadily until 2020 and then rising markedly in the following years before slightly declining in 2023. The similarity between reported and adjusted leverage confirms the persistence of increased financial risk throughout the period.

Overall Patterns and Insights

The analysis reveals a period of asset growth up to 2020, succeeded by asset contraction. Meanwhile, shareholders’ equity deteriorated substantially post-2019, causing a significant rise in financial leverage. The company appears to have increasingly funded its operations through debt rather than equity, which may indicate heightened financial risk. The consistency between reported and adjusted figures supports the reliability of these observed trends.

Net income (loss) trend

Net income demonstrated a strong positive performance in 2018 and 2019, with values of 3,152 million and 2,990 million US dollars, respectively. However, there was a substantial decline beginning in 2020, with net losses reaching -10,236 million US dollars. This negative trend persisted with losses of -9,501 million in 2021 and -6,093 million in 2022, followed by a significant improvement to a near break-even point of -74 million in 2023.

Revenue trend

Revenues increased from 18,881 million US dollars in 2018 to 20,825 million in 2019. However, a sharp decline occurred in 2020, dropping to 5,595 million and further to 1,908 million in 2021. Revenue recovered noticeably in 2022 to 12,168 million and surpassed pre-2020 levels in 2023, reaching 21,593 million US dollars.

Reported net profit margin trend

The reported net profit margin was positive and healthy in 2018 and 2019, at 16.69% and 14.36%, respectively. In 2020, this margin turned sharply negative at -182.95%, indicating substantial losses relative to revenues. This downward trajectory intensified in 2021 with a margin of -497.96%, followed by gradual improvement in 2022 (-50.07%) and 2023 (-0.34%).

Adjusted net income (loss) trend

Adjusted net income followed a similar pattern as reported net income, with positive values of 2,986 million and 2,873 million in 2018 and 2019, respectively. Significant losses were recorded in 2020 (-9,606 million), 2021 (-9,567 million), and 2022 (-6,574 million). By 2023, adjusted net income neared zero, at -30 million.

Adjusted net profit margin trend

Adjusted net profit margin mirrored the reported net profit margin, starting positive at 15.81% and 13.8% in 2018 and 2019, turning sharply negative in 2020 (-171.69%) and 2021 (-501.42%). The margin improved in 2022 to -54.03% and further to -0.14% in 2023, indicating reduced losses relative to revenue.

Summary of financial trends

The data reflects a pronounced downturn commencing in 2020, coinciding with an abrupt decline in revenues and a shift from net profits to substantial losses. While the losses persisted through 2021 and 2022, both revenues and profitability indicators started to recover by 2022 and strengthened further in 2023, approaching pre-downturn levels. This recovery is evidenced by the near breakeven adjusted and reported net incomes and improved profit margins. The overall pattern suggests a strong business disruption period followed by progressive financial stabilization.

Net Income (Loss)

Net income exhibited a positive figure in 2018 and 2019, with values of $3,152 million and $2,990 million respectively. However, beginning in 2020, there was a significant downturn resulting in substantial losses, with the peak loss recorded at -$10,236 million in 2020. Although losses persisted through 2021, 2022, and 2023, there was a marked reduction in the loss magnitude by 2023, which nearly approached breakeven at -$74 million.

Shareholders' Equity

Shareholders’ equity showed an increasing trend from 2018 to 2019, rising slightly from $24,443 million to $25,365 million. From 2020 onwards, equity experienced a continuous decline, falling sharply to $20,555 million in 2020 and further declining each year thereafter, ending at $6,882 million in 2023. This steady decrease over the period reflects a significant erosion of the company’s capital base.

Reported Return on Equity (ROE)

Reported ROE indicated profitability in 2018 and 2019, with returns of 12.9% and 11.79% respectively. Beginning in 2020, ROE turned sharply negative, showing a loss of -49.8%. This downward trend worsened over the next three years, reaching a nadir at -86.24% in 2022. In 2023, ROE improved significantly, moving closer to zero at -1.08%, suggesting a reduction in net losses relative to equity.

Adjusted Net Income (Loss)

Adjusted net income followed a similar pattern to reported net income, with slight reductions in profitability from 2018 ($2,986 million) to 2019 ($2,873 million). From 2020, adjusted net income reflected heavy losses reaching -$9,606 million. Losses persisted through 2021 and 2022, with a peak loss of -$9,567 million. By 2023, adjusted losses diminished substantially to -$30 million, signaling an improving profitability trend after significant operational challenges.

Adjusted ROE

Adjusted ROE was positive at 12.22% in 2018 and 11.33% in 2019, consistent with the profitability indicated by adjusted net income. Subsequently, ROE turned negative from 2020 onwards, registering a sharp decline to -46.73% in 2020 and further deteriorating to -93.05% in 2022. By 2023, adjusted ROE showed improvement to -0.44%, indicating that adjusted losses were being mitigated relative to shareholders’ equity, though the company remained below profitability.

Net Income (Loss)

The net income experienced a significant decline over the period analyzed. Starting from a positive $3,152 million in 2018, it slightly decreased to $2,990 million in 2019. However, a substantial loss occurred in 2020 amounting to -$10,236 million, followed by continued losses in subsequent years with -$9,501 million in 2021, -$6,093 million in 2022, and nearly breaching a break-even point at -$74 million in 2023. This indicates a severe impact on profitability beginning in 2020, with gradual improvement but no return to profitability by 2023.

Total Assets

Total assets showed a generally increasing trend from 2018 through 2020, rising from $42,401 million to a peak of $53,593 million. Following this peak, assets slightly declined to $53,344 million in 2021 and continued on a downward trend to $49,120 million by 2023. This suggests some deleveraging or asset reduction after 2020, possibly reflecting strategic adjustments or asset sales in response to financial and operational challenges.

Reported Return on Assets (ROA)

The reported ROA followed a deteriorating trend corresponding with the net income losses. It started at 7.43% in 2018 and decreased to 6.64% in 2019. From 2020 onwards, ROA turned negative, registering -19.1% in 2020 and staying in negative territory through 2023, although it showed a gradual recovery from -17.81% in 2021 to -0.15% in 2023. This pattern indicates worsening asset profitability during the peak loss years, with some stabilization but no return to profitability by the end of the period.

Adjusted Net Income (Loss)

The adjusted net income figures mirrored the trends of reported net income, with minor differences in magnitude. Positive adjusted earnings were recorded at $2,986 million in 2018 and $2,873 million in 2019. Afterwards, notable negative adjustments occurred, with losses widening to -$9,606 million in 2020 and persisting through 2023 with a slight improvement trend. The adjusted figures confirm the underlying operational challenges and losses indicated by the reported net income figures.

Adjusted Total Assets

Adjusted total assets demonstrated a similar trend to the reported total assets, increasing from $42,764 million in 2018 to $53,593 million in 2020 before declining subsequently. This alignment suggests consistency between reported and adjusted asset valuations, with both reflecting an increase in the initial years followed by a reduction likely reflecting strategic responses to operational pressures.

Adjusted Return on Assets (ROA)

Adjusted ROA closely tracked the pattern of the reported ROA. It decreased from 6.98% in 2018 to 6.12% in 2019, then declined sharply into negative territory from 2020 onwards. Though there was slight improvement post-2020, with the adjusted ROA moving from -17.92% in 2020 to -0.06% in 2023, the ratio remained negative throughout most of the period indicating ongoing challenges in generating positive returns from assets when excluding certain adjustments.