How many brand lines operate under corporation shell

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Reference no: EM131816000

Question: Carnival Corporation The budgeting process helps firms to identify sources of revenues and expenses as well as the timing of cash flows. While many parts of the budgeting process are confidential, there are some things that may be identifiable by someone outside the firm who would like to make some potential budget projections for the following year. Consider Carnival Corporation , the cruise ship fi rm. Go to the Carnival Web site at www.carnivalcorp.com .

1. Look at the list of Carnival Corporation's global brands. How many different brand lines operate under the corporation shell? What are they? Visit a couple of the links. Do the brands each offer exactly the same services? Why might the firm have different names for the cruise lines serving different areas?

2. The sales figure is one of the most important pieces of information the firm uses in beginning the planning process. Carnival's sales figure is made up primarily of two parts-the number of passenger cruise days and the price charged for each passenger cruise day. Go to "Investor Relations" and then "Financial Reports." From the list of Annual Reports, open Carnival's annual report (10-K) for the most recent year. Notice the total revenues for the year and then find information about passenger capacity. What is the occupancy percentage?

3. Find the information provided by management about the expected increase in passenger capacity during the coming years. Assuming revenue increases in proportion to passenger capacity, what would be the expected revenue for 2012? Should the firm expect an increase in costs associated with the increase in capacity? When budgeting for these costs, would the costs be proportional to the increase in revenues? Why or why not?

4. The other component in revenue is how much the passenger pays for the cruise. Select one of the cruise line links from the main page. Find the subsequent link that takes you to information about cruise prices. Are prices for the same length cruise always the same? Look at the fine print with respect to the cruise pricing. What does it tell about how the price is determined? Why might the capacity level of the cruise determine the price that is charged for the cruise?

Reference no: EM131816000

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