Use the annual report of Carnival Corporation for the 2007 fiscal year to answer the following questions. This information can be found on either the annual report or the SEC 10-K filing at by following the links to Investor Relations.
(a) Calculate Carnival’s quick ratios for 2006 and 2007.
(b) What do the quick ratios calculated in part (a) indicate about Carnival’s liquidity?
(c) All else being equal, what effects would each of the following have on the quick ratio?
(1) An increase in cash and cash equivalents
(2) A decrease in short-term investments
(3) An increase in current liabilities
(4) An increase in inventory
(5) An increase in sales revenue
(d) Comment on the change in the quick ratio from 2006 to 2007. What account(s) is (are) primarily responsible for this change?
(e) Does anything in Carnival’s Notes to the Financial Statements help explain the change in the accounts comprising the calculation of the quick ratio? If so, what information is provided?

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