Analysis of Carnival Corporation and Plc with Ratio Analysis

Running head: ACCOUNTING AND FINANCE
Accounting and Finance
Name of the Student
Name of the University
Author’s Note

1ACCOUNTING AND FINANCE
Executive Summary
The main aim of this report is the analysis of the performance of Carnival Corporation and
Plc with the help of ratio analysis for the years 2013, 2014, 2015 and 2016. This report
provides information about the company. This report also discusses about the advantages and
disadvantages of Ratio Analysis. The next part involves in calculation as well as
interpretation of the ratios of the company.

2ACCOUNTING AND FINANCE
Table of Contents
Introduction of the Company.....................................................................................................3
Ratio Analysis............................................................................................................................3
Literature Review...................................................................................................................3
What is Ratio Analysis.......................................................................................................3
Advantages of Ratio Analysis............................................................................................3
Disadvantages of Ratio Analysis.......................................................................................4
Calculation and Interpretation................................................................................................4
Profitability ratios...............................................................................................................4
Liquidity Ratios..................................................................................................................5
Gearing Ratios....................................................................................................................6
Conclusion..................................................................................................................................7
References and Bibliography.....................................................................................................9
Appendix..................................................................................................................................11

3ACCOUNTING AND FINANCE
Introduction of the Company
Carnival Corporation and Plc (Carnival) is one of the leading British-American cruise
operator. In the recent years, Carnival is considered as the world’s largest travel leisure
company as the company has a combined fleet of over hundred vessels across ten cruise line
brands including Princess, famously known as the line of the Love Boat along with Cunard,
Queen Mary and others (carnivalcorp.com 2018). It needs to be mentioned that Carnival
services worldwide basis and the company operates in the hospitality as well as tourism
industry. Carnival was founded in the year of 1972 and it is headquartered at Miami, Florida,
United States. The company has an employee base of 120,000 employees worldwide and it
serves more than 11.5 million passengers on yearly basis. In the year 2017, Carnival had a
revenue of $17.510 billion along with an operating income of $2.809 billion in the same year.
The net income of the company for the same year was $2.606 billion. In Carnival, on a
distinctive seven-day cruise, the company collects 9,300 pounds of recyclables so that they
can be processed. At the same time, it needs to be mentioned that the business activities of
Carnival generated 373,738 jobs along with paying $19.4 billion in wages to the American
workers (phx.corporate-ir.net 2018). Thus, based on the business of Carnival in terms of
financial figures and others, it can be said that the company has a great chance to expand their
business in the future years.
Ratio Analysis
Literature Review
What is Ratio Analysis
Ratio Analysis can be considered as the process to examine and compare financial
information of the companies through the calculation of their financial statements’ figures. It
helps in comparing the relationship between the accounts of the financial statements. It
implies that it help in comparing one company’s balance sheet and income statement to the
same of another company. The following discussion shows the advantages as well as
disadvantages of the ratio analysis (Delen, Kuzey and Uyar 2013).
Advantages of Ratio Analysis
Ratio analysis assists in validating or disproving the financial investment and
operating decision of the companies. It helps in summarizing the financial statements into
comparative figures that assists the managements in comparing as well as evaluating the
financial position of the companies (Gitman, Juchau and Flanagan 2015). In addition, it