Carnival Corp. & plc (NYSE:CCL)

The analyzed data exhibits clear trends in financial leverage and debt management over the periods observed. The evolution of the debt ratios and interest coverage provides insights into the company’s changing financial risk profile and capacity to service its debt.

Debt to Equity

This ratio shows a steady increase from 0.39 at the beginning of the period to a peak of 5.75 in May 2023, before slightly declining to approximately 4.6 by February 2024. The inclusion of operating lease liabilities follows a similar trajectory but with marginally higher values, indicating the impact of lease obligations on overall leverage. This upward trend implies a significant increase in reliance on debt financing relative to shareholders’ equity over time.

Debt to Capital

This ratio rises moderately from 0.28 to a maximum of 0.85 around mid-2023, before stabilizing around 0.82 in early 2024. The variation including operating lease liabilities is consistently higher but follows the same pattern. The increase suggests a growing proportion of debt within the company’s capital structure, although the change is less dramatic than the debt to equity ratio.

Debt to Assets

Debt to assets increased from 0.23 initially to roughly 0.68 in early 2023, then slightly decreased to 0.62 by February 2024. With operating lease liabilities included, the ratio is marginally higher, peaking near 0.7. This progression reflects an increasing share of assets financed through debt, suggesting leveraged asset growth or asset base compression relative to debt.

Financial Leverage

Financial leverage shows a pronounced rise from approximately 1.7 to a peak exceeding 8.8 by mid-2023, followed by a decline to around 7.45 in early 2024. The upward movement indicates significant growth in total assets funded by equity, amplified by the increasing debt levels. The decline may suggest efforts to reduce leverage or asset revaluation.

Interest Coverage

The interest coverage ratio exhibits a marked deterioration over time. From stable and strong coverage levels exceeding 15 in early periods, it plummets to negative values through 2020 and onwards, hitting lows around -11.7 in August 2020. Recovery begins very late with marginal positive coverage observed in early 2024, yet it remains precariously low. This pattern reflects heightened difficulties in meeting interest obligations, likely due to increased interest expenses or reduced earnings before interest and taxes.

Overall, these trends indicate that the company has substantially increased its debt load over the analyzed periods, elevating financial leverage and associated risk. The deterioration in interest coverage highlights potential stress in servicing this debt, suggesting increased financial vulnerability, especially pronounced from 2020 onward. The slight improvements near the end of the data may signal early stages of financial recovery or strategic deleveraging.

Total Debt

The total debt exhibits a generally increasing trend over the observed periods. Starting at 9,559 million US dollars in February 2018, the debt gradually rose with some fluctuations until early 2020. A significant surge is noted from February 2020 onwards, reaching a peak of over 33,000 million US dollars by November 2021. Subsequent quarters show some decline and stabilization around 30,000 to 31,000 million US dollars by early 2024.

Shareholders' Equity

Shareholders’ equity maintains a relatively stable level during the first two years, fluctuating slightly around 24,000 million US dollars. From early 2020 onwards, a marked decline begins, with equity dropping steeply through 2021 and 2022, reaching its lowest point around 5,800 to 7,000 million US dollars during 2023 and early 2024. This indicates a significant erosion of equity over the period analyzed, especially post-2020.

Debt to Equity Ratio

The debt to equity ratio remains below 1.0 prior to 2020, suggesting comparatively moderate leverage. However, starting in early 2020, the ratio escalates sharply, doubling and then climbing beyond 5.0 by mid-2023. This reflects a substantial increase in indebtedness relative to equity, corresponding with the decline in equity and increase in debt. Towards late 2023 and early 2024, the ratio slightly reduces but remains elevated around 4.4 to 4.6, indicating continued high financial leverage.

Summary

The data reflects a period of increasing financial leverage and stress beginning in early 2020. The total debt has more than tripled from pre-2020 levels, while shareholders’ equity has diminished significantly, resulting in a sharp rise in the debt to equity ratio. This trend suggests increased reliance on debt financing and a weakening equity base, which could indicate higher financial risk. The stabilization of debt and marginal improvements in leverage ratios in the final quarters offer some signs of financial adjustment, but overall the company maintains a high level of indebtedness relative to its equity.

The financial data reveals significant trends regarding the company’s debt levels, equity base, and leverage ratio over the examined period.

Total Debt (including operating lease liability)

The total debt exhibited moderate fluctuations from February 2018 through November 2019, generally ranging between approximately $9.6 billion and $11.5 billion. From February 2020 onward, the debt rose sharply, peaking at around $28.4 billion by November 2020. Following this peak, the debt level continued to increase steadily, reaching its highest point near $36.2 billion by February 2022. From that point forward through February 2024, total debt remained relatively elevated, fluctuating between roughly $31.9 billion and $36.4 billion with a modest downward trend in late 2023 and early 2024.

Shareholders’ Equity

Shareholders’ equity showed a gradual decline over the period. Starting from about $24.4 billion in early 2018, it remained relatively stable until early 2020. However, from the onset of 2020, equity experienced a pronounced decrease, dropping steadily in value and reaching a low point of approximately $5.9 billion by May 2023. There was a slight recovery toward the end of the period, with equity rising to about $6.7 billion by February 2024, though it remained significantly lower than in earlier years.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio significantly increased during the examined timeframe, reflecting rising leverage and financial risk. Initially, the ratio hovered below 0.5 from February 2018 through late 2019, indicating a conservative leverage position relative to equity. Beginning in early 2020, the ratio spiked sharply, reaching over 1.3 by the end of 2020 and continuing to rise substantially thereafter. The ratio peaked above 5.9 by May 2023, signaling that debt levels vastly exceeded shareholders' equity. Toward the latest periods, a slight decrease in leverage was observed, with the ratio declining to about 4.8 by February 2024, although the overall leverage remained considerably elevated relative to the starting point.

In summary, the company increased its debt burden considerably since early 2020, likely in response to external pressures or strategic funding requirements, while its equity concurrently diminished. This combination resulted in a marked escalation in financial leverage, potentially indicating increased risk exposure. The slight moderation of debt and leverage levels in the most recent quarters suggests some stabilization, but the elevated leverage ratio highlights a substantial reliance on debt financing relative to equity.

Total Debt

Over the observed periods, total debt demonstrated an overall increasing trend. Starting at approximately 9.6 billion USD in early 2018, total debt gradually increased through 2019, peaking in early 2020 at around 12.9 billion USD. From mid-2020 onward, there was a sharp increase, reaching a maximum of over 33 billion USD in late 2021. Following this peak, total debt showed some fluctuations but generally stabilized above 30 billion USD through early 2024.

Total Capital

Total capital was relatively stable around 33.9 to 36.8 billion USD during 2018 and 2019, with a gradual upward movement reaching around 37.2 billion USD by early 2020. Post the first quarter of 2020, total capital increased significantly, hitting a high above 51 billion USD in early 2021. However, from mid-2021 onwards, total capital consistently declined reaching approximately 37.4 billion USD by early 2024, indicating a contraction from its peak.

Debt to Capital Ratio

The debt to capital ratio shows a clear increasing trend throughout the data timeline. Beginning at about 0.28 in early 2018, the ratio rose steadily to 0.35 by early 2020. Following this, the ratio experienced a marked increase coinciding with rising debt levels and relatively stagnant or declining capital, reaching a peak ratio of approximately 0.85 by mid-2023. In the most recent periods, the ratio plateaued slightly above 0.8, reflecting a sustained high leverage position.

Summary Insights

The company’s financial structure shifted significantly over the period analyzed. There was a pronounced increase in leverage, especially beginning in early 2020, suggesting increased reliance on debt financing relative to total capital. The surge in debt coupled with a declining trend in total capital from its peak reflects a potential riskier financial position. The stabilization of the debt to capital ratio at a high level indicates that the company maintained this elevated leverage for an extended period. This pattern warrants careful consideration in terms of financial risk management and capital structure optimization.

Total Debt (including operating lease liability)

The total debt exhibited a gradual increase from February 2018 through November 2019, rising from approximately $9.56 billion to $11.5 billion. Thereafter, the debt level escalated sharply, peaking at nearly $28.4 billion by November 2020. Following this peak, the debt continued to grow until February 2022, reaching above $36 billion. From this point, a general downward trend is observed through February 2024, with debt declining to just over $32 billion.

Total Capital (including operating lease liability)

Total capital initially showed modest growth from about $33.9 billion in February 2018 to roughly $38.7 billion in February 2020. Subsequently, total capital increased significantly to a high of $52.5 billion by February 2021 before starting a marked decline. From that point until February 2024, total capital steadily decreased to about $38.7 billion.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio hovered around 0.28 to 0.31 during the early periods up to November 2019. Starting in February 2020, the ratio increased sharply, reaching 0.58 by November 2020 and continuing to climb to a peak of 0.86 by May 2023. Towards the end of the period, this ratio slightly decreased but remained elevated around 0.82 to 0.83 as of February 2024.

Overall Financial Trends

From early 2018 to late 2019, both total debt and capital were relatively stable with slight increases, and the debt to capital ratio remained low and stable indicating a conservative capital structure. From 2020 onward, there is a pronounced rise in both debt and capital levels, particularly noticeable in the debt figures, reflecting increased leverage. The debt to capital ratio nearly doubled during this period, indicative of heightened financial risk and increased reliance on debt financing. In the most recent periods, total debt has begun to decline, accompanied by a decrease in total capital, but the debt to capital ratio remains high, suggesting that despite reductions in total debt, the leverage remains elevated relative to capital levels.

The financial data reveals several notable trends related to the company's debt, assets, and leverage ratio over the examined periods.

Total Debt

Total debt shows a generally increasing trend from February 2018 through February 2024. Starting at approximately 9.6 billion US dollars in early 2018, total debt gradually rose to about 13 billion by early 2020. A significant increase is observed in mid-2020, peaking near 33 billion US dollars by late 2021.

Subsequently, total debt stabilized somewhat in the range of 30 to 35 billion US dollars through early 2024, showing minor fluctuations but no major reductions. This sharp increase in debt beginning in 2020 coincides with the onset of the COVID-19 pandemic period, suggesting increased borrowing during this time.

Total Assets

Total assets fluctuated in a narrower band compared to debt. The value hovered around 41 to 45 billion US dollars from 2018 through early 2020, then increased moderately to a peak of approximately 57 billion US dollars in early 2021. Post this peak, total assets generally declined and remained in the mid-40 billion range through early 2024.

This pattern indicates that asset growth was limited compared to the growth in debt, especially considering the peak and subsequent decline observed after early 2021.

Debt to Assets Ratio

The debt to assets ratio reflects the company's leverage and increased markedly over the period. Initially stable at about 0.23 to 0.26 from 2018 through early 2020, the ratio surged significantly from 0.28 in February 2020 to around 0.67 by early 2023, indicating a substantial rise in debt relative to assets.

Post-2023, the ratio showed signs of minor improvement, gradually decreasing to around 0.62 by February 2024. However, the leverage remains elevated compared to pre-2020 levels, signifying increased financial risk or higher reliance on debt financing.

Overall, the data depicts a company that substantially increased its debt starting in 2020, more than doubling debt levels while assets experienced moderate growth followed by a decline. This shift has led to a significantly higher leverage ratio, suggesting a strategic shift or response to economic conditions resulting in heightened debt utilization relative to asset base.

The financial data indicates an evolving relationship between total debt and total assets over the examined periods, highlighting significant leverage trends.

Total Debt (Including Operating Lease Liability)

The total debt shows a general upward trajectory from February 2018 to February 2024. Initially, debt figures increased moderately, fluctuating slightly around the 9,500 to 11,500 million US$ range until early 2020. From February 2020, a substantial increase is evident, peaking at approximately 34,600 million US$ by late 2021. Following the peak, slight reductions occur but the debt remains elevated above 31,800 million US$, displaying high leverage compared to earlier periods.

Total Assets

Total assets exhibit a steady growth trend from approximately 41,400 million US$ in early 2018 to a peak near 57,200 million US$ in early 2021. After this peak, assets decline slightly, stabilizing around 49,000 to 51,900 million US$ in the later periods. This decline following early 2021 suggests asset base contraction or asset revaluation during the post-peak period.

Debt to Assets Ratio

The debt to assets ratio follows an increasing pattern over the full timeframe. Initially stable at roughly 0.23 to 0.26 during 2018 and 2019, the ratio sharply rises starting in early 2020, coinciding with the sharp increase in debt. It reaches a maximum near 0.70 by mid-2023, indicating heightened leverage and increased financial risk. The latter part of the dataset shows minor improvements with ratios declining gradually to approximately 0.64 by early 2024, but still considerably higher than pre-2020 levels.

Overall Analysis

The data reflects a period of significant balance sheet expansion in terms of debt, especially from 2020 onward, which likely corresponds with increased borrowing or financing activities. While total assets grew until early 2021, the subsequent contraction combined with persistently high debt levels suggests a tightening of asset base relative to liabilities. The increasing debt-to-assets ratio highlights rising financial leverage and potential exposure to credit risk. Slight improvements in leverage ratios in the most recent quarters may suggest efforts toward deleveraging, yet the ratios remain elevated compared to the pre-2020 baseline.

The financial data presented reveals noteworthy trends in the company's asset base, shareholders' equity, and financial leverage over a period spanning from early 2018 to early 2024.

Total Assets

Total assets demonstrated a generally upward trajectory through to late 2020, increasing from approximately $41.4 billion in February 2018 to a peak near $57.2 billion in February 2021. Following this peak, a gradual decline is apparent, reaching around $49.8 billion by February 2024. This pattern suggests initial growth followed by a period of contraction or asset reduction in recent years.

Shareholders’ Equity

In contrast to the total assets trend, shareholders’ equity exhibits a consistent downward movement throughout the observed timeframe. Starting from about $24.4 billion in early 2018, it declined steadily to approximately $6.7 billion by February 2024. The decline appears particularly pronounced from early 2020 onwards, indicating a significant erosion of equity base which may reflect accumulated losses, dividend payments, or other equity-reducing activities.

Financial Leverage

Financial leverage, defined as the ratio of total assets to shareholders’ equity, displays a marked increasing trend over the period under review. The ratio rose from around 1.7 times in early 2018 to over 7.4 times by early 2024. This escalation reflects the combination of growing total assets in the initial years alongside a considerable reduction in shareholders’ equity. The increase in leverage indicates greater reliance on debt or other liabilities relative to equity, implying heightened financial risk and potentially greater strain on the company’s capital structure.

Overall, the company's balance sheet reflects a phase of asset growth followed by contraction alongside a steady decrease in equity and increasing leverage. This trend suggests challenges to the financial stability and risk profile, particularly evident from 2020 onwards.

The financial data reveals notable fluctuations and trends in key profitability and solvency metrics over the observed periods.

Earnings Before Interest and Tax (EBIT)

EBIT exhibited considerable volatility throughout the timeframe. Initially, the figures ranged between moderate positive values, peaking notably at 1,879 million US dollars in August 2018 and again reaching 1,879 million US dollars in August 2019. However, starting from February 2020, there was a marked decline, with EBIT turning negative and hitting a low of -4,203 million US dollars in May 2020. This substantial decrease likely reflects impactful operational challenges during that period. Subsequent quarters maintained negative EBIT, though the magnitude of losses gradually lessened, culminating in a return to positive territory by August 2023 (1,583 million US dollars), followed by a moderate decline to 257 million US dollars by February 2024.

Interest Expense, Net of Capitalized Interest

Interest expense demonstrated a general upward trajectory over the periods. Early figures ranged from 48 to 54 million US dollars, showing relative stability. However, from February 2020 onward, there was a significant increase, with expenses rising sharply to 182 million US dollars and further escalating to a peak of 542 million US dollars by May and August 2023. This increase in interest costs corresponds with the periods of negative EBIT, suggesting increased borrowing or refinancing activity amid operational difficulties. The final measurement in February 2024 shows a slight reduction to 471 million US dollars.

Interest Coverage Ratio

The interest coverage ratio, which measures the ability to cover interest expenses from operating earnings, mirrors the trends seen in EBIT and interest expense. The ratio was robust in early periods, with values around 15 to 17, indicating strong coverage. However, starting in February 2020, the ratio plunged into negative territory, reaching as low as -11.71, reflecting the company's inability to generate sufficient earnings to cover interest expenses during this period. The ratio remained negative into 2022 and early 2023, although it showed gradual improvement. By November 2023 and February 2024, the ratio returned to positive values, albeit below the earlier highs, signaling a recovering but still constrained capacity to meet interest obligations.