Question

Ratios

Calculate all* of the ratios listed in exhibit 14-26, "Summary of Analytical Measures," for Carnival Corp in 2018 (you do not need to do ratios for 2017).

* Because Carnival inventory sales are a small fraction of their revenues, do not calculate Inventory Turnover, Days Sales in Inventory, or Gross Profit. You also do not need to calculate EPS or Return on Common Stockholders' Equity

In any place where the formula calls for an average, use the 2017 number plus the 2018 number divided by 2.

EXHIBIT 14-26 Summary of Analytical Measures Ratios or Other Method of Measurements Computation Measures of short-term liquidity Significance Current ratio Current Assets Current Liabilities A measure of short-term debt-paying ability A measure of short-term debt-paying ability A measure of short-term debt-paying ability Quick Assets Current Liabilities Quick ratio Current Assets - Current Liabilities Working capital Appears in the statement of cash flows Net cash provided by operating activities Cash flow from operations to current liabilities Accounts receivable turnover rate Days to collect average accounts receivable Cash Flows from Operating Activities Current Liabilities Net Sales Average Accounts Receivable Indicates the cash generated by operations after allowing for cash payment of expenses and operating liabilities Indicates ability to cover currently maturing obligations from recurring operations Indicates how quickly receivables are collected Indicates in days how quickly receivables are collected Indicates how quickly inventory sells Indicates in days how quickly inventory sells 365 Days Accounts Receivable Turnover Rate Cost of Goods Sold Average Inventory Inventory turnover rate Days to sell the average inventory 365 Days Inventory Turnover Rate Days to Sell Inventory + Days to Collect Receivables Indicates in days how quickly cash invested in inventory converts back into cash Operating cycle Free cash flow Excess of operating cash flow over basic needs Net Cash from Operating Activities - Cash Used for Investing Activities and Dividends Measures of long-term credit risk Total Liabilities Total Assets Debt ratio Trend in net cash provided by operating activities Percentage of assets financed by creditors; indicates relative size of the equity position Indicator of a company's ability to generate the cash necessary to meet its obligations Appears in comparative statements of cash flows Income before Interest and Taxes Annual Interest Expense Indicator of a company's ability to meet its interest payment obligations Interest coverage ratio Measures of profitability

Answer 1

current ratio	current assets / current liabilities
	2018 ($ million)
current assets	2225
current liabilities	9204
current ratio	0.24
quick ratio	quick assets / current liabilities
	2018 ($ million)
cash	982
trade and receivable	358
total quick assets	1340
current liabilities	9204
quick ratio	0.15
working capital	current assets - current liabilities
	2018 ($ million)
current assets	2225
current liabilities	9204
working capital	-6979
net cash provided by operating activities	from cash flow statement
	2018 ($ million)
net cash provided by operating activities	5549
cash flow from operations to current liabilities	cash flow from operating activites / current liabilities
	2018 ($ million)
cash flow from operating activites	5549
current liabilities	9204
cash flow from operations to current liabilities	0.602890048
accounts receivable turnover	net sales / average accounts receivable
	2018 ($ million)
net sales	18881
opening accounts receivable	358
closing accounts receivable	312
average accounts receivable	335
accounts receivable turnover	56.36
days to collect average account receivable	365 / accounts receivable turnover
	2018 ($ million)
accounts receivable turnover	56.36
days to collect average account receivable	6.48
operating cycle free cash flow	net cash from operating activities - cash used for investing activites and dividend
	2018 ($ million)
net cash provided by operating activities	5549
less cash used for investing activites	3502
less dividend	1355
operating cycle free cash flow	692
debt ratio	total liabilities / total assets
	2018 ($ million)
current liabilities	9204
long-term debt	7897
other long term liabilities	856
total liabilities	17957
total assets	42401
debt ratio	0.42
trend in net cash provided operating activities	from cash flow statement (difference 2018 - 2017)
	2018 ($ million)
increasing trend	227
interest coverage ratio	earnings before interest and tax / interest expense
	2018 ($ million)
earnings before interest and tax	3325
interest expense	194
interest coverage ratio	17.14
operating expenses ratio	operating expenses / net sales
	2018 ($ million)
operating expenses	15556
net sales	18881
operating expenses ratio	0.82
return on assets	operating income / average total assets
	2018 ($ million)
operating income	3325
opening total assets	40778
closing total assets	42401
average total assets	41589.5
return on assets	0.08
return on equity	net income / average total equity
	2018 ($ million)
net income	3152
opening equity	24216
closing equity	24443
average total equity	24329.5
return on equity	0.13