Intrinsic value of Carnival - CCL

Previous Close

$56.33

  Intrinsic Value

$9.45

stock screener

  Rating & Target

str. sell

-83%

Previous close

$56.33

 
Intrinsic value

$9.45

 
Up/down potential

-83%

 
Rating

str. sell

We calculate the intrinsic value of CCL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 29.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.40
  9.86
  9.37
  8.94
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.53
  6.37
  6.24
  6.11
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
Revenue, $m
  19,331
  21,237
  23,228
  25,304
  27,465
  29,714
  32,053
  34,483
  37,009
  39,634
  42,362
  45,198
  48,147
  51,215
  54,408
  57,734
  61,198
  64,809
  68,575
  72,504
  76,605
  80,888
  85,363
  90,039
  94,929
  100,043
  105,395
  110,995
  116,859
  122,999
Variable operating expenses, $m
  15,673
  17,177
  18,748
  20,386
  22,092
  23,867
  25,713
  27,631
  29,624
  31,696
  33,432
  35,670
  37,998
  40,419
  42,939
  45,564
  48,298
  51,148
  54,120
  57,220
  60,457
  63,837
  67,368
  71,059
  74,918
  78,955
  83,178
  87,598
  92,225
  97,071
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  15,673
  17,177
  18,748
  20,386
  22,092
  23,867
  25,713
  27,631
  29,624
  31,696
  33,432
  35,670
  37,998
  40,419
  42,939
  45,564
  48,298
  51,148
  54,120
  57,220
  60,457
  63,837
  67,368
  71,059
  74,918
  78,955
  83,178
  87,598
  92,225
  97,071
Operating income, $m
  3,658
  4,060
  4,480
  4,917
  5,373
  5,847
  6,340
  6,852
  7,385
  7,938
  8,930
  9,528
  10,149
  10,796
  11,469
  12,170
  12,900
  13,662
  14,455
  15,284
  16,148
  17,051
  17,994
  18,980
  20,011
  21,089
  22,217
  23,398
  24,634
  25,928
EBITDA, $m
  5,997
  6,588
  7,206
  7,849
  8,520
  9,218
  9,943
  10,697
  11,481
  12,295
  13,141
  14,021
  14,936
  15,887
  16,878
  17,910
  18,984
  20,104
  21,273
  22,491
  23,764
  25,092
  26,480
  27,931
  29,448
  31,034
  32,694
  34,432
  36,251
  38,155
Interest expense (income), $m
  211
  497
  590
  688
  789
  895
  1,006
  1,121
  1,240
  1,364
  1,494
  1,628
  1,767
  1,912
  2,063
  2,220
  2,383
  2,553
  2,730
  2,914
  3,107
  3,307
  3,517
  3,736
  3,965
  4,204
  4,454
  4,715
  4,988
  5,275
  5,574
Earnings before tax, $m
  3,162
  3,470
  3,792
  4,128
  4,478
  4,841
  5,219
  5,612
  6,020
  6,444
  7,302
  7,760
  8,237
  8,733
  9,250
  9,787
  10,348
  10,932
  11,541
  12,177
  12,841
  13,534
  14,258
  15,015
  15,807
  16,635
  17,502
  18,409
  19,359
  20,354
Tax expense, $m
  854
  937
  1,024
  1,115
  1,209
  1,307
  1,409
  1,515
  1,625
  1,740
  1,972
  2,095
  2,224
  2,358
  2,497
  2,643
  2,794
  2,952
  3,116
  3,288
  3,467
  3,654
  3,850
  4,054
  4,268
  4,492
  4,726
  4,970
  5,227
  5,495
Net income, $m
  2,308
  2,533
  2,768
  3,013
  3,269
  3,534
  3,810
  4,097
  4,395
  4,704
  5,331
  5,665
  6,013
  6,375
  6,752
  7,145
  7,554
  7,980
  8,425
  8,889
  9,374
  9,880
  10,409
  10,961
  11,539
  12,144
  12,777
  13,439
  14,132
  14,858

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  45,061
  49,504
  54,144
  58,983
  64,022
  69,264
  74,715
  80,381
  86,268
  92,386
  98,745
  105,356
  112,230
  119,382
  126,826
  134,578
  142,653
  151,070
  159,848
  169,007
  178,567
  188,550
  198,980
  209,882
  221,280
  233,202
  245,675
  258,730
  272,398
  286,711
Adjusted assets (=assets-cash), $m
  45,061
  49,504
  54,144
  58,983
  64,022
  69,264
  74,715
  80,381
  86,268
  92,386
  98,745
  105,356
  112,230
  119,382
  126,826
  134,578
  142,653
  151,070
  159,848
  169,007
  178,567
  188,550
  198,980
  209,882
  221,280
  233,202
  245,675
  258,730
  272,398
  286,711
Revenue / Adjusted assets
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
Average production assets, $m
  39,203
  43,069
  47,106
  51,316
  55,700
  60,261
  65,003
  69,932
  75,054
  80,377
  85,909
  91,661
  97,642
  103,864
  110,340
  117,084
  124,110
  131,433
  139,070
  147,038
  155,355
  164,041
  173,115
  182,600
  192,516
  202,888
  213,740
  225,099
  236,990
  249,442
Working capital, $m
  -5,954
  -6,541
  -7,154
  -7,794
  -8,459
  -9,152
  -9,872
  -10,621
  -11,399
  -12,207
  -13,047
  -13,921
  -14,829
  -15,774
  -16,758
  -17,782
  -18,849
  -19,961
  -21,121
  -22,331
  -23,594
  -24,914
  -26,292
  -27,732
  -29,238
  -30,813
  -32,462
  -34,187
  -35,993
  -37,884
Total debt, $m
  10,928
  12,731
  14,616
  16,580
  18,626
  20,754
  22,967
  25,268
  27,658
  30,142
  32,724
  35,407
  38,198
  41,102
  44,124
  47,271
  50,550
  53,968
  57,531
  61,250
  65,131
  69,184
  73,419
  77,845
  82,473
  87,313
  92,377
  97,678
  103,227
  109,038
Total liabilities, $m
  18,295
  20,098
  21,983
  23,947
  25,993
  28,121
  30,334
  32,635
  35,025
  37,509
  40,091
  42,774
  45,565
  48,469
  51,491
  54,638
  57,917
  61,335
  64,898
  68,617
  72,498
  76,551
  80,786
  85,212
  89,840
  94,680
  99,744
  105,045
  110,594
  116,405
Total equity, $m
  26,766
  29,405
  32,162
  35,036
  38,029
  41,143
  44,381
  47,746
  51,243
  54,877
  58,655
  62,581
  66,665
  70,913
  75,335
  79,939
  84,736
  89,736
  94,950
  100,390
  106,069
  111,999
  118,194
  124,670
  131,440
  138,522
  145,931
  153,686
  161,805
  170,306
Total liabilities and equity, $m
  45,061
  49,503
  54,145
  58,983
  64,022
  69,264
  74,715
  80,381
  86,268
  92,386
  98,746
  105,355
  112,230
  119,382
  126,826
  134,577
  142,653
  151,071
  159,848
  169,007
  178,567
  188,550
  198,980
  209,882
  221,280
  233,202
  245,675
  258,731
  272,399
  286,711
Debt-to-equity ratio
  0.410
  0.430
  0.450
  0.470
  0.490
  0.500
  0.520
  0.530
  0.540
  0.550
  0.560
  0.570
  0.570
  0.580
  0.590
  0.590
  0.600
  0.600
  0.610
  0.610
  0.610
  0.620
  0.620
  0.620
  0.630
  0.630
  0.630
  0.640
  0.640
  0.640
Adjusted equity ratio
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594
  0.594

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,308
  2,533
  2,768
  3,013
  3,269
  3,534
  3,810
  4,097
  4,395
  4,704
  5,331
  5,665
  6,013
  6,375
  6,752
  7,145
  7,554
  7,980
  8,425
  8,889
  9,374
  9,880
  10,409
  10,961
  11,539
  12,144
  12,777
  13,439
  14,132
  14,858
Depreciation, amort., depletion, $m
  2,338
  2,528
  2,726
  2,932
  3,147
  3,371
  3,603
  3,845
  4,096
  4,357
  4,211
  4,493
  4,786
  5,091
  5,409
  5,739
  6,084
  6,443
  6,817
  7,208
  7,615
  8,041
  8,486
  8,951
  9,437
  9,945
  10,477
  11,034
  11,617
  12,228
Funds from operations, $m
  4,646
  5,061
  5,494
  5,946
  6,416
  6,905
  7,413
  7,942
  8,491
  9,061
  9,542
  10,158
  10,800
  11,467
  12,161
  12,884
  13,638
  14,423
  15,242
  16,097
  16,989
  17,921
  18,895
  19,912
  20,976
  22,089
  23,254
  24,473
  25,749
  27,086
Change in working capital, $m
  -561
  -587
  -613
  -639
  -666
  -693
  -720
  -749
  -778
  -808
  -840
  -873
  -908
  -945
  -984
  -1,024
  -1,067
  -1,112
  -1,160
  -1,210
  -1,263
  -1,319
  -1,378
  -1,440
  -1,506
  -1,575
  -1,648
  -1,725
  -1,806
  -1,891
Cash from operations, $m
  5,207
  5,648
  6,107
  6,585
  7,082
  7,597
  8,133
  8,690
  9,269
  9,870
  10,382
  11,032
  11,708
  12,412
  13,145
  13,908
  14,705
  15,535
  16,402
  17,307
  18,252
  19,240
  20,273
  21,353
  22,482
  23,665
  24,902
  26,198
  27,555
  28,977
Maintenance CAPEX, $m
  -1,741
  -1,922
  -2,111
  -2,309
  -2,515
  -2,730
  -2,954
  -3,186
  -3,428
  -3,679
  -3,940
  -4,211
  -4,493
  -4,786
  -5,091
  -5,409
  -5,739
  -6,084
  -6,443
  -6,817
  -7,208
  -7,615
  -8,041
  -8,486
  -8,951
  -9,437
  -9,945
  -10,477
  -11,034
  -11,617
New CAPEX, $m
  -3,686
  -3,865
  -4,037
  -4,210
  -4,384
  -4,561
  -4,742
  -4,929
  -5,122
  -5,323
  -5,532
  -5,751
  -5,981
  -6,222
  -6,476
  -6,744
  -7,026
  -7,323
  -7,637
  -7,968
  -8,317
  -8,686
  -9,074
  -9,484
  -9,917
  -10,372
  -10,852
  -11,358
  -11,891
  -12,452
Cash from investing activities, $m
  -5,427
  -5,787
  -6,148
  -6,519
  -6,899
  -7,291
  -7,696
  -8,115
  -8,550
  -9,002
  -9,472
  -9,962
  -10,474
  -11,008
  -11,567
  -12,153
  -12,765
  -13,407
  -14,080
  -14,785
  -15,525
  -16,301
  -17,115
  -17,970
  -18,868
  -19,809
  -20,797
  -21,835
  -22,925
  -24,069
Free cash flow, $m
  -220
  -139
  -41
  66
  182
  306
  437
  575
  718
  868
  910
  1,069
  1,234
  1,403
  1,577
  1,756
  1,940
  2,128
  2,322
  2,522
  2,727
  2,939
  3,157
  3,382
  3,615
  3,855
  4,104
  4,362
  4,630
  4,908
Issuance/(repayment) of debt, $m
  1,733
  1,804
  1,884
  1,964
  2,046
  2,128
  2,213
  2,300
  2,390
  2,484
  2,582
  2,684
  2,791
  2,904
  3,022
  3,147
  3,279
  3,417
  3,564
  3,718
  3,881
  4,053
  4,235
  4,426
  4,628
  4,840
  5,064
  5,300
  5,549
  5,811
Issuance/(repurchase) of shares, $m
  242
  106
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,975
  1,910
  1,884
  1,964
  2,046
  2,128
  2,213
  2,300
  2,390
  2,484
  2,582
  2,684
  2,791
  2,904
  3,022
  3,147
  3,279
  3,417
  3,564
  3,718
  3,881
  4,053
  4,235
  4,426
  4,628
  4,840
  5,064
  5,300
  5,549
  5,811
Total cash flow (excl. dividends), $m
  1,755
  1,771
  1,843
  2,031
  2,228
  2,434
  2,650
  2,875
  3,109
  3,352
  3,491
  3,753
  4,025
  4,307
  4,599
  4,903
  5,218
  5,546
  5,886
  6,240
  6,609
  6,992
  7,392
  7,808
  8,243
  8,696
  9,169
  9,663
  10,179
  10,718
Retained Cash Flow (-), $m
  -2,550
  -2,639
  -2,756
  -2,874
  -2,993
  -3,114
  -3,238
  -3,365
  -3,497
  -3,634
  -3,777
  -3,927
  -4,084
  -4,248
  -4,422
  -4,604
  -4,797
  -5,000
  -5,214
  -5,440
  -5,679
  -5,930
  -6,196
  -6,475
  -6,770
  -7,082
  -7,409
  -7,755
  -8,119
  -8,502
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -795
  -868
  -914
  -844
  -765
  -680
  -588
  -490
  -389
  -283
  -286
  -174
  -59
  58
  178
  299
  421
  546
  672
  800
  930
  1,062
  1,196
  1,333
  1,472
  1,614
  1,759
  1,908
  2,060
  2,217
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -762
  -795
  -795
  -695
  -593
  -493
  -397
  -307
  -223
  -148
  -136
  -74
  -22
  20
  52
  76
  92
  101
  103
  102
  96
  88
  78
  68
  57
  47
  38
  30
  22
  17
Current shareholders' claim on cash, %
  99.2
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9

Carnival Corporation is a leisure travel company. The Company is a cruise company of global cruise guests, and a provider of vacations to all cruise destinations throughout the world. The Company operates in four segments: North America, EAA, Cruise Support and, Tour and Other. The Company's North America segment includes Carnival Cruise Line, Holland America Line, Princess Cruises (Princess) and Seabourn. The Company's Cruise Support segment represents certain of its port and related facilities and other services that are provided for the benefit of its cruise brands and Fathom's selling, general and administrative expenses. Its EAA segment includes AIDA Cruises (AIDA), Costa Cruises (Costa), Cunard, P&O Cruises (Australia), P&O Cruises (the United Kingdom) and ship operations of Fathom. Its Tour and Other segment represents the hotel and transportation operations of Holland America Princess Alaska Tours and three ships that the Company bareboat charter to unaffiliated entities.

FINANCIAL RATIOS  of  Carnival (CCL)

Valuation Ratios
P/E Ratio 15.5
Price to Sales 2.3
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 7.9
Price to Free Cash Flow 19.5
Growth Rates
Sales Growth Rate 6.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 33.5%
Cap. Spend. - 3 Yr. Gr. Rate 7.3%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 28.9%
Total Debt to Equity 38%
Interest Coverage 14
Management Effectiveness
Return On Assets 7.1%
Ret/ On Assets - 3 Yr. Avg. 6.6%
Return On Total Capital 8%
Ret/ On T. Cap. - 3 Yr. Avg. 7.3%
Return On Equity 11.1%
Return On Equity - 3 Yr. Avg. 10.1%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 40%
Gross Margin - 3 Yr. Avg. 40.9%
EBITDA Margin 26.4%
EBITDA Margin - 3 Yr. Avg. 26.2%
Operating Margin 16%
Oper. Margin - 3 Yr. Avg. 17.1%
Pre-Tax Margin 15.2%
Pre-Tax Margin - 3 Yr. Avg. 14.6%
Net Profit Margin 14.9%
Net Profit Margin - 3 Yr. Avg. 14.3%
Effective Tax Rate 2.3%
Eff/ Tax Rate - 3 Yr. Avg. 2.1%
Payout Ratio 37.5%

CCL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CCL stock intrinsic value calculation we used $17510 million for the last fiscal year's total revenue generated by Carnival. The default revenue input number comes from 0001 income statement of Carnival. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CCL stock valuation model: a) initial revenue growth rate of 10.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CCL is calculated based on our internal credit rating of Carnival, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Carnival.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CCL stock the variable cost ratio is equal to 81.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CCL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Carnival.

Corporate tax rate of 27% is the nominal tax rate for Carnival. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CCL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CCL are equal to 202.8%.

Life of production assets of 20.4 years is the average useful life of capital assets used in Carnival operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CCL is equal to -30.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $24216 million for Carnival - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 530.611 million for Carnival is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Carnival at the current share price and the inputted number of shares is $29.9 billion.

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