Microsoft Excel LibreOffice Calc

Marriott International Inc. (NASDAQ:MAR)


Financial Reporting Quality: Aggregate Accruals

Advanced level

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Marriott International Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Operating Assets
Total assets 25,051  23,696  23,948  24,140  6,082 
Less: Cash and equivalents 225  316  383  858  96 
Operating assets 24,826  23,380  23,565  23,282  5,986 
Operating Liabilities
Total liabilities 24,348  21,471  20,217  18,783  9,672 
Less: Current portion of long-term debt 977  833  398  309  300 
Less: Long-term debt, excluding current portion 9,963  8,514  7,840  8,197  3,807 
Operating liabilities 13,408  12,124  11,979  10,277  5,565 
 
Net operating assets1 11,418  11,256  11,586  13,005  421 
Balance-sheet-based aggregate accruals2 162  (330) (1,419) 12,584 
Financial Ratio
Balance-sheet-based accruals ratio3 1.43% -2.89% -11.54% 187.46%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Booking Holdings Inc. -42.38% -18.20% 5.34% 3.05%
McDonald’s Corp. 4.56% 0.61% 5.51% -4.33%
Starbucks Corp. 25.97% -119.87% -7.62% 9.78% 17.91%
Balance-Sheet-Based Accruals Ratio, Sector
Travel & Leisure -4.51% -14.37% 0.04% 25.73%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Services 10.80% 16.01% 7.32% 15.29%

Based on: 10-K (filing date: 2020-02-27), 10-K (filing date: 2019-03-01), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-18).

1 2019 Calculation
Net operating assets = Operating assets – Operating liabilities
= 24,82613,408 = 11,418

2 2019 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2019 – Net operating assets2018
= 11,41811,256 = 162

3 2019 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 162 ÷ [(11,418 + 11,256) ÷ 2] = 1.43%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Marriott International Inc. improved earnings quality from 2018 to 2019.

Cash-Flow-Statement-Based Accruals Ratio

Marriott International Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income 1,273  1,907  1,372  780  859 
Less: Net cash provided by operating activities 1,685  2,357  2,436  1,582  1,430 
Less: Net cash (used in) provided by investing activities (284) (52) 1,020  (2,409) 367 
Cash-flow-statement-based aggregate accruals (128) (398) (2,084) 1,607  (938)
Financial Ratio
Cash-flow-statement-based accruals ratio1 -1.13% -3.48% -16.95% 23.94%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Booking Holdings Inc. -76.63% -28.98% 14.43% 12.35%
McDonald’s Corp. 3.98% 5.92% -3.98% -1.70%
Starbucks Corp. -22.66% -120.76% -6.31% 6.75% 8.79%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Travel & Leisure -14.14% -14.68% -2.82% 6.56%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Services 1.58% 7.02% 4.04% 1.93%

Based on: 10-K (filing date: 2020-02-27), 10-K (filing date: 2019-03-01), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-18).

1 2019 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × -128 ÷ [(11,418 + 11,256) ÷ 2] = -1.13%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Marriott International Inc. improved earnings quality from 2018 to 2019.