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Microsoft Excel LibreOffice Calc

Marriott International Inc. (MAR)


Analysis of Bad Debts

Difficulty: Advanced

Allowance for doubtful accounts receivable (bad debts) is a contra account which reduce the balance of the company’s gross accounts receivable.The relationship between the allowance and the balance in receivables should be relatively constant unless there is a change in the economy overall or a change in customer base.


Receivables Accounting Policy

Accounts Receivable

The accounts receivable primarily consist of amounts due from hotel owners with whom Marriott has management and franchise agreements and includes reimbursements of costs Marriott incurred on behalf of managed and franchised properties. Marriott generally collects these receivables within 30 days. Marriott records an accounts receivable reserve when losses are probable, based on an assessment of historical collection activity and current business conditions. Marriott’s accounts receivable reserve was $66 million at year-end 2018 and $46 million at year-end 2017.

Source: 10-K (filing date: 2019-03-01).


Allowance for Doubtful Accounts Receivable

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Accounts receivable reserve hidden hidden hidden hidden hidden
Accounts and notes receivable, gross hidden hidden hidden hidden hidden
Ratio
Allowance as a percentage of accounts and notes receivable, gross1 hidden hidden hidden hidden hidden

Based on: 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), 10-K (filing date: 2015-02-19).

2018 Calculations

1 Allowance as a percentage of accounts and notes receivable, gross = 100 × Accounts receivable reserve ÷ Accounts and notes receivable, gross
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Allowance as a percentage of accounts and notes receivable, gross Allowance for doubtful accounts divided by the gross accounts receivable. Marriott International Inc.’s allowance as a percentage of accounts and notes receivable, gross increased from 2016 to 2017 and from 2017 to 2018.

Allowance for Credit Losses

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (USD $ in millions)
Allowance for credit losses hidden hidden hidden hidden hidden
Notes receivable, gross hidden hidden hidden hidden hidden
Ratio
Allowance as a percentage of notes receivable, gross1 hidden hidden hidden hidden hidden

Based on: 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), 10-K (filing date: 2015-02-19).

2018 Calculations

1 Allowance as a percentage of notes receivable, gross = 100 × Allowance for credit losses ÷ Notes receivable, gross
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Allowance as a percentage of notes receivable, gross Allowance for credit losses divided by the gross financing receivable. Marriott International Inc.’s allowance as a percentage of notes receivable, gross increased from 2016 to 2017 but then declined significantly from 2017 to 2018.