Carnival Matrix

Section 1

Carnival Corporation was incorporated in Panama in 1972 and Carnival plc was incorporated in England and Wales in 2000. Carnival Corporation and Carnival plc operate a dual listed company ("DLC") The two companies operate as if they are a single economic enterprise with a single senior executive management team and identical Boards of Directors, despite each having retained a separate legal identity. Over the years, Carnival has acquired representation in virtually every market segment of the cruise industry. With 100 cruise ships, they are the largest cruise company and among the most profitable and financially strong leisure travel companies in the world.

The foundation for the company was laid by cruise industry pioneer, Ted Arison. In 1972 Arison forged a partnership to build the young company into a full-fledged cruise line. The company struggled for two years, but Arison remained as focused on his vision. In 1974, he proved his determination, buying full ownership of the Carnival, and it's uncertain future, for $1 in cash and the assumption of $5 million in debt. It was then, when Arison would spend the rest of his life making his $1 investment into the largest and one of the most profitable cruise lines in the world.

Carnival's operating structure is decentralized, with each of its major brands having its own headquarters and operating team, creating an ownership culture that is an important for driving internal performance. This approach results in delivering products and services that are tailored to specific geographic markets and lifestyles, allowing more effective target marketing. Although Carnival operates under a decentralized structure, they consolidate their purchasing power and implementation of cross-branding. Their 100 ships sail to all of the world's major cruise destinations, including the Caribbean, Europe, Asia, Australia, and Alaska.

Carnival's "mission is to take the world on vacation and deliver exceptional experiences through many of the world's best-known cruise brands that cater to a variety of different geographic regions and lifestyles, all at an outstanding value unrivaled on land or at sea." They stand for the ability to provide and exceed the expectations of their costumers, while providing unique cruise products and services, for a great value.

Section 2

Opportunities

Weight Rating Weighted Score

1. Emerging Ports/ New Cruise Destinations 0.13 4 0.52

2. Shipboard Innovations 0.06 2 0.12

3. More specific customer segments 0.10 3 0.30

4. Chinese Market 0.15 4 0.6

5. Co-Branding 0.07 2 0.14

Threats

Weight Rating Weighted Score

1. Public Image 0.15 3 0.45

2. Environmental Impact 0.09 4 0.36

3. Terrorism/ World Political Unrest 0.07 2 0.14

4. Tax Challenges 0.06 2 0.12

5. Energy Costs 0.12 4 0.48

Total 1.00 * 3.23

Section 3

IFE Matrix

Strengths

Weight Rating Weighted Score

1. Strong Cash Flow / Steady Revenue 0.15 4 0.52

2. Low Debt To Income 0.1 3 0.30

3. Billion Dollar Credit Line 0.05 2 0.10

4. Management Experience & Excellence 0.08 3 0.24

5. Dominant Cruise line in the industry 0.15 4 0.60

= 1.76

Weaknesses

Weight Rating Weighted Score

1. Large fleet / Low Quality 0.12 1 0.12

2. Inconsistency with Brands 0.07 2 0.14

3. Uncoordinated Business Operations 0.13 2 0.26

4. Deep Discount Pricing 0.07 2 0.14

5. "Low Cost" Strategy being copied 0.08 3 0.24

= .9

Total 1.00 2.66

Section 4

Profitability Ratio - Net Profit Margin - This is the bottom line margin that tells management how much of every sales dollar is left after

deducting the cost of goods sold, operating expenses, financial charges and taxes.

Nov 30, 2012 Nov 30, 2011 Nov 30, 2010

CLL RCL CLL RCL CLL RCL

Net profit after taxes 1,298,000 18,287 1,912,000 607,421 1,978,000 515,663

Sales (Revenue) 15,382,000 7,688,024 15,793,000 7,537,263 14,469,000 6,752,504

= Net profit margin 0.0844 0.0024 0.1211 0.0806 0.1367 0.0764

8.44 0.24 12.11 8.06 13.67 7.64

Net profit margin is an indicator of how efficient a company is and how well it controls its costs. The higher the margin is, the more effective the company is in converting revenue into actual profit.

Answer the question: "would you invest in this stock?"

Carnival has had a very rough year so far. They are still suffering because of the Costa Concordia accident in 2012 in this year incidents do not seem to stop either. Carnival had several power outages and passengers were forced to live without AC and working toilets. Last month a six year old boy drowned in the pool. There are no lifeguards at the pools and children under 13 are supposed to be under parental supervision. So even if it was just a terrible accident it will has consequences for Carnival.

These incidents did not only damage their reputation but also meant a loss

...