Use the annual report of Carnival Corporation for the 2007 scal year to answer the following questions.

Question:

Use the annual report of Carnival 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 www.carnival.com by following the links to Investor Relations.
Required:
(a) Does Carnival use the direct or indirect method to prepare a statement of cash ﬂows?
(b) List the major cash inﬂows from each of the three activities sections for 2007.
(c) List the major cash outﬂows from each of the three activities sections for 2007.
(d) Compare Carnival’s net income and cash ﬂows from operations for 2005, 2006 and 2007. Comment on the relationship each year and the change from year to year.
(e) Calculate cash ﬂows per share for 2005, 2006, and 2007.How does cash ﬂow pershare compare to basic earnings per share?
(f) In part (d), you compare cash ﬂows from operations and net income. In part (e), you compare cash ﬂows per share and earnings per share. Is one of these techniques better than another?
(g) Assume the viewpoint of a supplier, an investor, and an employee. Comment on the cash ﬂow data from each perspective.
(h) Does Carnival raise a signiﬁcant portion of money through ﬁnancing activities or investing activities? List any signiﬁcant inﬂows.
(i) Does the industry in which Carnival operates and/or the economy affect how much cash is provided or used by each business activity?
(j) Calculate all cash ﬂow ratios that are possible using the data available.
(k) What is Carnival’s free cash ﬂow? Did Carnival spend a signiﬁcant amount of money on purchasing PP&E assets? What does that indicate from an investor’s perspective?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...