Carnival Corp. & plc (NYSE:CCL)

The financial data reveals significant shifts in the company's leverage and ability to service debt over the analyzed periods.

Debt to equity

There is a clear upward trend from early 2019 through early 2024, with the ratio increasing from 0.48 to a peak around 5.75 in mid-2023 before slightly declining to 4.6 by February 2024. The inclusion of operating lease liabilities follows a similar pattern, indicating that overall debt levels relative to equity have substantially increased over time, particularly from early 2020 onward.

Debt to capital

This ratio also shows a steady increase from about 0.32 in early 2019 to roughly 0.82-0.85 in the most recent periods, reflecting a higher proportion of debt in the company’s capital structure. When operating lease liabilities are included, the ratio slightly accentuates this increase, confirming a consistent rise in total debt relative to capital.

Debt to assets

A similar trend is observed in debt to assets ratios, growing from approximately 0.26 to around 0.62 over the span, which suggests increasing leverage and reliance on debt financing against total assets. Including operating lease liabilities pushes the ratio slightly higher, signifying additional commitments that enhance the company's liabilities relative to its asset base.

Financial leverage

The financial leverage ratio escalates markedly, climbing from about 1.8 to a high exceeding 8 before a minor reduction near 7.4. This significant rise confirms increasing reliance on debt to finance assets, which typically amplifies both risk and return potential.

Interest coverage

Interest coverage ratios exhibit a sharp decline from a strong position above 15 in 2019 to deeply negative figures spanning -7.55 to -0.77 between mid-2020 and early 2023. A modest recovery is apparent by early 2024 with positive but low coverage ratios around 1.2. This indicates the company faced substantial challenges in covering interest expenses during much of the pandemic period, potentially reflecting operational disruptions or increased debt burden.

Overall, the data illustrates a significant increase in financial leverage and debt commitments over the years, accompanied by a stressed interest coverage capacity, especially during 2020 to 2023. The trends suggest heightened financial risk, likely tied to external factors impacting operations and necessitating greater debt financing. Recent modest improvements in interest coverage could signal early signs of stabilization in the company's ability to service its debt obligations.

The analyzed financial data reveals distinct trends in the company's debt, equity, and leverage over the period from early 2019 through early 2024. There is a clear evolution in the capital structure and financial risk profile.

Total Debt

The company's total debt displayed an increasing trend over the full time horizon. Starting at approximately $11.6 billion in February 2019, debt rose gradually until early 2020. A sharp increase occurred from May 2020 through early 2021, reaching over $31 billion. Post this spike, the debt level fluctuated around the $30 billion mark with a slight decreasing tendency towards early 2024, ending close to $30.7 billion.

Shareholders' Equity

Shareholders’ equity showed a consistent declining pattern throughout the analyzed period. Beginning with about $24.2 billion in early 2019, equity steadily decreased, notably accelerating from early 2020 onwards. By late 2021 and into 2022, equity reduced significantly reaching below $10 billion. The downward trend persisted through 2023 and early 2024, leveling off somewhat near $6.7 billion at the end of the period.

Debt to Equity Ratio

The debt to equity ratio increased substantially over the timeframe, illustrating a rise in financial leverage and risk. Initially below 0.5 in early 2019, the ratio climbed gradually until early 2020, then sharply escalated throughout 2020 and 2021, peaking above 5.7 in mid-2023. Towards early 2024, the ratio slightly decreased but remained elevated above 4.5, indicating a materially higher reliance on debt relative to equity compared to the beginning of the period.

In summary, the data points to a pronounced increase in borrowing concurrent with a significant depletion of equity capital, culminating in a markedly higher leverage position. This pattern may suggest increased financial stress or strategic debt financing, requiring continued monitoring of the company's ability to service its obligations and maintain solvency.

Total Debt (Including Operating Lease Liability)

The total debt showed a generally increasing trend over the analyzed periods. Starting at approximately 11,586 million USD in February 2019, it remained relatively stable until November 2019. A sharp increase occurred in early 2020, coinciding with the onset of the global pandemic, reaching a peak of around 28,380 million USD by November 2020. After that, the total debt continued to rise, peaking near 36,440 million USD in February 2023. Subsequently, there was a moderate decline through the last reported quarter, reaching about 32,015 million USD in February 2024.

Shareholders' Equity

Shareholders’ equity exhibited a declining trend throughout the period. Beginning at approximately 24,241 million USD in February 2019, equity levels decreased noticeably from early 2020 onwards. By November 2021, equity had declined to roughly 12,144 million USD, a drop of about 50% compared to the starting point. This downward trajectory continued, reaching a low near 5,865 million USD in May 2023 before stabilizing somewhat, ending at approximately 6,682 million USD in February 2024.

Debt to Equity Ratio (Including Operating Lease Liability)

The debt to equity ratio revealed a significant increase over the period, reflecting the combined effect of rising debt and shrinking equity. The ratio was below 0.5 in early 2019, indicating relatively low leverage. Starting February 2020, the ratio sharply increased, crossing the 1.0 threshold and reaching around 2.2 by August 2021. The upward trend accelerated further, peaking at 5.98 in May 2023, before slightly declining to just under 4.8 by February 2024. This indicates a substantial increase in leverage, raising potential concerns about financial risk and capital structure sustainability.

The analysis of the financial data over the given periods reveals several notable trends in the company's debt and capital structure.

Total Debt

The total debt shows a fluctuating yet overall increasing trend from February 28, 2019, to February 29, 2024. Initial debt stood at approximately $11,586 million and generally increased over time, peaking at $35,136 million in February 28, 2023. Subsequently, a marginal decline is observed towards the end of the period, with debt around $30,739 million by February 29, 2024. The substantial jump in debt during 2020 is particularly pronounced, coinciding with external economic challenges during that period.

Total Capital

Total capital experienced gradual growth from early 2019 through early 2020, starting at about $35,827 million and rising to just over $37,228 million. From mid-2020 onwards, total capital exhibits a general declining trend, decreasing from around $47,511 million in late 2020 to approximately $37,421 million by the end of the analyzed period. This suggests a contraction in the company's capital base in more recent quarters.

Debt to Capital Ratio

The debt to capital ratio demonstrates a significant upward trajectory, indicating an increasing reliance on debt financing relative to total capital. Beginning at 0.32 in early 2019, the ratio escalated steadily, sharply rising in 2020 and crossing above the 0.5 mark. It peaked near 0.85 in early 2023, suggesting that debt comprised a majority portion of the company’s capital structure at that time. The ratio stabilized around 0.82 toward the end of the period, maintaining a relatively high level.

In summary, the company has increased its leverage markedly over the analyzed time frame, with total debt rising considerably while total capital has declined somewhat in later years. The elevated debt to capital ratio reflects greater financial leverage and a shift toward debt financing dominance. This trend warrants attention due to potential implications for financial risk and interest obligations.

The financial data reveals distinct trends in the company's debt levels and capital structure over the analyzed period.

Total Debt (Including Operating Lease Liability)

The total debt experienced a gradual increase from early 2019 through the onset of 2020, with amounts rising from approximately $11.6 billion to $14.4 billion. A marked escalation occurred during 2020, peaking at $28.4 billion by November 2020. This increased leverage level persisted through 2021 and into early 2022, where debt peaked near $36.4 billion before slightly declining. From mid-2022 to early 2024, total debt demonstrated a gradual downward trend, ending near $32 billion, suggesting efforts to deleverage or stabilize the debt position.

Total Capital (Including Operating Lease Liability)

Total capital started at approximately $35.8 billion in early 2019 and showed a steady increase, peaking around $52.5 billion in February 2021. Post this peak, total capital steadily contracted, moving down to around $38.7 billion by February 2024. This decline in total capital following the 2021 peak may indicate reduced asset base or equity levels, or increased liabilities offsetting capital.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio was relatively stable at around 0.30 to 0.32 in 2019, indicating moderate leverage. A sharp increase occurred during 2020, rising from 0.37 in February to 0.58 in November, reflecting the substantial debt accumulation. The ratio continued to climb through 2021, peaking at about 0.86 in the latter half of the year, indicating a high leverage position. It remained elevated through 2022 and into early 2023, slightly fluctuating but generally around 0.82 to 0.86. Notably, from mid-2023 onward, there was a mild decrease and stabilization around 0.82 to 0.83 by early 2024, reflecting partial deleveraging or capital adjustments.

In summary, the company increased its leverage significantly during 2020 and 2021, likely as a response to external challenges or strategic financing needs. Following the peak leverage, there were signs of stabilization and moderate deleveraging, both in absolute debt levels and in the capital structure ratio, though debt remains substantially higher than pre-2020 levels. The contraction in total capital after early 2021 also suggests shifts in the company’s asset or equity base, which, combined with elevated debt levels, points toward a cautious financial positioning in recent periods.

Total Debt

The total debt exhibited a general increasing trend from early 2019 to early 2021, rising from approximately $11.6 billion in February 2019 to a peak of around $33.2 billion in November 2021. This upward trajectory accelerated notably from early 2020 through late 2020, indicating a significant increase in borrowings during that period. Following the peak, the debt levels started to decline gradually, reaching approximately $30.7 billion by February 2024. Despite the reduction observed in the later periods, the debt remains substantially higher than pre-2020 levels.

Total Assets

Total assets showed a moderate growth from early 2019 through early 2020, climbing from approximately $43.9 billion to nearly $47.0 billion. Subsequently, the asset base expanded steadily, peaking around $57.2 billion in February 2021. However, after this peak, total assets experienced a gradual decline, falling to about $49.8 billion by February 2024. This contraction in asset levels over the later periods contrasts with the earlier growth phase, indicating possible divestitures, depreciation, or other factors impacting the asset base.

Debt to Assets Ratio

The debt-to-assets ratio remained relatively stable and low (around 0.24 to 0.26) through 2019, reflecting a conservative leverage profile. Starting in early 2020, the ratio increased sharply, rising from 0.28 in February 2020 to a peak of 0.68 by early 2023. This upward trend was driven by the more rapid increase in total debt compared to total assets during this period. After reaching its apex, the ratio showed a slight decrease but remained elevated at approximately 0.62 by February 2024, indicating sustained higher leverage compared to pre-pandemic levels.

Overall Insights

The data indicate that the subject increased its leverage significantly beginning in early 2020, likely in response to external pressures or strategic financing decisions. The surge in debt outpaced asset growth during this time, resulting in a much higher debt-to-assets ratio that persisted through early 2024 despite some reduction in total debt. The period post-peak shows attempts at deleveraging and stabilization of the asset base. The elevated leverage level suggests increased financial risk and potential impact on future financial flexibility.

The analysis of the financial data reveals several key trends in the company's leverage and asset base over the observed periods.

Total Debt (including operating lease liability)

The total debt exhibited a general increasing trend from February 2019 to November 2020, rising significantly from approximately $11.6 billion to $28.4 billion. This sharp increase coincides with the early stages of 2020, suggesting an elevated borrowing or liability related to operating leases during this period. Following this peak, debt levels continued to rise, reaching a maximum near $36.4 billion in February 2022. However, after this peak, a slow but discernible downward adjustment occurred through February 2024, with debt stabilizing around $32.0 billion.

Total Assets

Total assets showed moderate growth from around $43.9 billion in February 2019 to approximately $57.2 billion in February 2021. Subsequent to this peak, assets slightly declined and fluctuated within a narrower band between $49.1 billion and $53.3 billion up to the latest period in February 2024. This indicates a period of asset base contraction or revaluation following initial growth.

Debt to Assets Ratio (including operating lease liability)

The leverage ratio trended upward from 0.26 in early 2019, reaching a high of 0.70 around February 2023. This increase aligns with the growth in total debt and a reduction in the total asset base after 2021, reflecting an overall increase in financial leverage. Towards the most recent quarters, the ratio decreases slightly to 0.64, indicating either some deleveraging or asset base stabilization.

In summary, the data portrays an initial phase of rising leverage characterized by strong debt growth outpacing asset growth, peaking in early 2022 and 2023. Thereafter, the company appears to have slightly reduced its debt levels and experienced some asset base stabilization, leading to a modest decrease in the debt-to-assets ratio. These trends may reflect strategic financial management decisions responding to market conditions or operational challenges during the period, notably around the global disruptions starting in early 2020.

Total Assets

Total assets exhibited a general upward trajectory from February 2019 through February 2020, increasing from approximately $43.9 billion to $46.9 billion. Following this period, there was continued growth, peaking around November 2020 at approximately $53.6 billion. Subsequently, total assets remained relatively stable, fluctuating slightly but generally maintaining levels above $50 billion through early 2023.

However, from early 2023 to February 2024, a gradual decline is observable, with total assets decreasing to just under $50 billion by the most recent period. This suggests a possible contraction phase or asset divestiture occurring toward the end of the observed timeframe.

Shareholders’ Equity

Shareholders’ equity demonstrated a downward trend over the full period. Starting at around $24.2 billion in early 2019, equity remained relatively stable until early 2020, after which a significant decline took place. By mid-2020, equity had dropped sharply to approximately $20.8 billion, continuing to decrease through late 2021.

The decline continued steadily, dipping below $10 billion by early 2022 and falling further to around $6.7 billion by February 2024. This substantial erosion of equity points to ongoing financial challenges and may reflect losses or capital reductions impacting the company’s net asset base.

Financial Leverage

Financial leverage showed a consistent increase throughout the period analyzed. Beginning at a ratio of about 1.81 in early 2019, leverage rose steadily, particularly after early 2020, escalating sharply from 1.93 to 2.39 within a quarter and reaching a peak of approximately 8.84 in mid-2023.

Although there was a slight reduction in leverage following this peak, the ratio remained significantly elevated at around 7.45 by February 2024. This marked increase in financial leverage indicates a growing reliance on debt financing relative to equity, which correlates with the declining shareholders’ equity and suggests increased financial risk and potential strain on capital structure.

Overall Trends and Insights

Examining these three key financial metrics collectively reveals a company undergoing significant financial stress, particularly from early 2020 onward. While total assets generally increased initially, the sharp decline in shareholders’ equity combined with rising financial leverage indicates worsening solvency and growing indebtedness.

The erosion of equity alongside amplified leverage suggests that the company may have been incurring losses or absorbing impairments, necessitating greater borrowing or external financing to sustain operations or asset management strategies. The slightly declining asset base in the most recent periods may reflect asset sales, deleveraging efforts, or operational downsizing.

Overall, these financial trends imply increased financial vulnerability and a potentially higher risk profile for the company moving forward, necessitating close monitoring of debt servicing capability and capital adequacy.

The earnings before interest and tax (EBIT) exhibit significant volatility over the observed periods. Initially, EBIT showed positive values with a peak in August 2019 at 1,879 million USD, followed by a steep decline beginning in early 2020. This trend turned sharply negative from February 2020 through much of 2022, reflecting substantial operational challenges during this period. However, from early 2023 onward, EBIT gradually improved, shifting back into positive territory by August 2023 and maintaining positive values through February 2024, though still considerably below the peak levels seen prior to 2020.

Interest expense, net of capitalized interest, consistently increased throughout the timeline. Starting from 51 million USD in February 2019, interest expense exhibited a rising trend with a notable escalation beginning in early 2020, peaking at 542 million USD in May 2023. Although there was a modest decline to 467 and 471 million USD toward the end of the period, overall interest costs remain substantially higher than pre-2020 levels, indicating increased borrowing or higher interest rates impacting financial expenses.

The interest coverage ratio, which measures the ability to meet interest obligations from operating earnings, mirrors the trends observed in EBIT relative to rising interest expenses. Initially, coverage ratios were robust, ranging from approximately 15 to 17, indicating strong capacity to cover interest costs. However, a sharp deterioration occurred starting in February 2020, with negative ratios through most of 2020 and extended periods in 2021 and early 2022, suggesting an inability to cover interest expenses from EBIT during those quarters. Gradual improvement is observed from late 2022 into 2024, with the ratio returning to positive values just above 1 by the end of the analyzed timeframe, signifying marginal coverage capacity but still highlighting financial stress relative to previous healthy levels.

In summary, the company experienced a significant operational and financial downturn beginning in early 2020, with depressed EBIT and escalating interest expenses leading to severe coverage challenges. While recent quarters indicate some recovery in operational profitability and improved interest coverage, the levels remain subdued compared to the pre-2020 period, highlighting ongoing financial vulnerability and a need for continued focus on improving earnings and managing interest obligations.

EBIT Trend

Marked volatility with a peak in 2019, steep decline turning negative from 2020 to early 2023, followed by gradual recovery to positive values by mid to late 2023.

Interest Expense

Steady increase over time, with a significant rise starting in early 2020 and peaking in 2023, indicating higher borrowing costs or increased debt levels.

Interest Coverage Ratio

Strong coverage pre-2020, severe decline into negative territory during 2020 to 2022, with marginal improvement to slightly positive coverage by early 2024.