Marriott International Inc. (NASDAQ:MAR)

The financial data reveals notable fluctuations and significant trends over the five-year period under review.

Return on Assets (ROA)

The ROA exhibited variability, starting at a high of 14.12% in 2015, followed by a substantial decline to 3.23% in 2016. Subsequently, it showed a gradual recovery peaking at 8.05% in 2018 before decreasing again to 5.08% in 2019. This pattern suggests fluctuating efficiency in utilizing assets to generate earnings, with a marked dip in 2016 and a partial rebound thereafter.

Financial Leverage

There is a clear upward trend in financial leverage, commencing from a value of 4.51 in 2016 and progressively increasing to 35.63 by 2019. This sharp rise indicates a growing reliance on debt financing over the period, which may imply increased financial risk and a strategic shift toward leveraging to amplify returns.

Return on Equity (ROE)

ROE values show a dramatic increase from 14.56% in 2016 to an exceptional 181.08% by 2019. These escalating values align with the increase in financial leverage, suggesting that the company’s equity returns have been significantly amplified, likely due to the heightened use of debt. However, such extreme increases also warrant caution as they may reflect elevated financial risk or accounting effects related to leverage.

In summary, the data indicates a period marked by increasing financial leverage, which corresponds with a substantial improvement in return on equity, albeit with fluctuating returns on assets. The company’s strategy appears focused on leveraging debt to enhance equity returns, potentially increasing financial risk in the process. The fluctuating ROA further suggests varying efficiency in asset utilization during this time.

The financial data exhibits several distinct patterns over the five-year period ending December 31, 2019. The analysis focuses on four key financial ratios: Net Profit Margin, Asset Turnover, Financial Leverage, and Return on Equity (ROE).

Net Profit Margin

The net profit margin shows moderate variability, starting at 5.93% in 2015, decreasing slightly to 4.57% in 2016, then rising to a peak of 9.19% in 2018 before falling back to 6.07% in 2019. This pattern indicates fluctuations in profitability with a notable improvement in 2018, followed by a decline in the subsequent year, suggesting possible changes in operational efficiency or cost management.

Asset Turnover

Asset turnover, which reflects the efficiency of asset utilization in generating sales, exhibited a strong decline from 2.38 in 2015 to 0.71 in 2016. After 2016, it shows a gradual but modest recovery, reaching 0.96 in 2017, then slightly declining again in 2018 and 2019 to 0.88 and 0.84 respectively. Overall, this indicates a significant drop in asset efficiency from 2015 to 2016, followed by stabilization at a lower level, possibly reflecting changes in asset base or revenue generation capabilities.

Financial Leverage

Financial leverage data is unavailable for 2015, but from 2016 onwards, there is a clear upward trend. Leverage increased from 4.51 in 2016 to an exceptionally high 35.63 in 2019. This steep rise signals a significant increase in debt or other liabilities relative to equity, suggesting a strategy reliant on borrowed funds which could increase financial risk.

Return on Equity (ROE)

Return on equity, which measures profitability relative to shareholders' equity, shows an extraordinary upward trend from 14.56% in 2016 to 181.08% in 2019. This dramatic increase corresponds with the rise in financial leverage, indicating that while shareholders' returns have sharply improved, this may be largely driven by increased leverage rather than purely operational improvements. The extremely high ROE in later years warrants scrutiny for sustainability and risk exposure.

In summary, there is evidence of enhanced profitability in certain years and a clear increase in financial leverage, which has magnified returns to equity holders substantially. However, the declining asset turnover and fluctuating profit margins, combined with much greater leverage, suggest growing financial risk and changes in operational efficiency that merit deeper investigation.

The financial data reveals several notable trends over the analyzed periods, including fluctuations in profitability components, asset utilization, leverage, and overall shareholder returns.

Tax Burden

The tax burden ratio demonstrated variability, initially decreasing from 0.68 in 2015 to 0.48 in 2017, indicating a lower proportion of earnings paid as taxes. However, this ratio rose sharply to 0.81 in 2018 and remained relatively high at 0.80 in 2019, suggesting an increased tax expense burden in the later years.

Interest Burden

Interest burden showed a generally declining trend from 0.88 in 2015 to 0.80 in 2019, with some fluctuation in intermediate years. This decline indicates that the proportion of earnings before interest and taxes (EBIT) remaining after interest expense slightly reduced over time.

EBIT Margin

The EBIT margin exhibited considerable volatility, starting at 9.82% in 2015, dropping to its lowest point of 8.31% in 2016, then recovering to a peak of 13.65% in 2017. This margin slightly declined again in 2018 to 12.93% and more steeply to 9.5% in 2019, indicating fluctuating operational profitability.

Asset Turnover

Asset turnover ratio experienced a significant decline from 2.38 in 2015 to 0.71 in 2016, followed by a moderate recovery to 0.96 in 2017. Afterward, it gradually decreased to 0.88 in 2018 and 0.84 in 2019, reflecting a reduced efficiency in generating sales from assets over time.

Financial Leverage

Financial leverage data is missing for 2015 but shows a marked increasing trend from 4.51 in 2016 to 35.63 in 2019. This substantial rise suggests an aggressive increase in the use of debt or liabilities relative to equity, significantly amplifying financial risk.

Return on Equity (ROE)

ROE data is unavailable for 2015 but shows a remarkable upward trajectory from 14.56% in 2016 to an exceptionally high 181.08% in 2019. The sharp increase correlates with heightened financial leverage, indicating that equity holders experienced amplified returns due to leveraging, albeit with potential elevated risk.

In summary, the financial metrics suggest a company that increased leverage substantially in the latter years, resulting in dramatically higher ROE. Despite fluctuations in profitability margins and asset efficiency, the amplified financial leverage appears to have driven significant equity returns. However, the rising tax burden and decreasing interest burden ratios, combined with inconsistent operating margins and declining asset turnover, may signal underlying operational challenges alongside increased financial risk.

The analysis covers the trends in net profit margin, asset turnover, and return on assets (ROA) for the five-year period ending December 31, 2019.

Net Profit Margin

The net profit margin showed variability over the years. It started at 5.93% in 2015, experienced a dip to 4.57% in 2016, then increased to 5.99% in 2017. A significant jump to 9.19% was observed in 2018, followed by a decline to 6.07% in 2019. This pattern indicates fluctuating profitability with a peak in 2018.

Asset Turnover

Asset turnover decreased sharply from 2.38 in 2015 to 0.71 in 2016. It slightly recovered to 0.96 in 2017 but declined again to 0.88 in 2018 and further to 0.84 in 2019. The overall trend demonstrates a significant reduction in the company's efficiency in utilizing its assets to generate revenue after 2015, with minor improvements in the mid-period.

Return on Assets (ROA)

ROA followed a declining trend from 14.12% in 2015 to a low of 3.23% in 2016. It improved moderately in the subsequent years, reaching 5.73% in 2017 and 8.05% in 2018, but then decreased again to 5.08% in 2019. This movement corresponds to the trends noted in net profit margin and asset turnover, reflecting fluctuating overall profitability relative to asset base.

In summary, the company's profitability metrics presented an overall downward shift after 2015, with particular declines in asset efficiency and returns on assets, despite some recovery in profitability margins in 2017 and 2018. The peak in net profit margin in 2018 did not correspond with an improvement in asset turnover, suggesting changes in profitability were driven more by factors other than asset utilization efficiency during this period. The subsequent drops in 2019 across most metrics indicate challenges in maintaining profitability and asset utilization effectiveness.

Tax Burden

The tax burden ratio demonstrates variability over the reported period. It decreased from 0.68 in 2015 to a low of 0.48 in 2017, indicating a reduced tax impact on pre-tax earnings. However, there was a significant increase to 0.81 in 2018, which slightly declined to 0.80 in 2019. This suggests fluctuating tax efficiency with a trend of higher tax retention toward the latter years.

Interest Burden

The interest burden ratio exhibited a declining trend overall, starting at 0.88 in 2015 and reducing to 0.80 by 2019. This decline was gradual with some fluctuations, peaking at 0.91 in 2017 before steadily decreasing, indicating a gradual increase in interest expense relative to earnings before interest and taxes over time.

EBIT Margin

The EBIT margin showed an initial decline from 9.82% in 2015 to 8.31% in 2016, followed by a sharp increase to 13.65% in 2017. After a slight decrease to 12.93% in 2018, it dropped notably to 9.5% in 2019. This pattern reflects volatility in operating profitability with a peak in 2017 and a subsequent downward trend through 2019.

Asset Turnover

Asset turnover declined substantially in 2016 from 2.38 to 0.71. The ratio then improved slightly to 0.96 in 2017, before gradually decreasing again to 0.84 in 2019. Overall, asset utilization became less efficient compared to 2015 levels, indicating a decrease in revenue generated per unit of assets.

Return on Assets (ROA)

Return on assets experienced a steep drop from 14.12% in 2015 to 3.23% in 2016. Although it partially recovered to 5.73% in 2017 and further to 8.05% in 2018, ROA declined again to 5.08% in 2019. This trend signals challenges in asset profitability, with a sharp initial deterioration followed by moderate recovery and a subsequent decline.

Tax Burden

The tax burden ratio exhibited fluctuations over the analyzed periods. Starting at 0.68 in 2015, it declined to 0.48 by 2017, indicating a temporary reduction in the proportion of earnings paid as tax. However, it subsequently surged to 0.81 in 2018 and remained relatively stable at 0.80 in 2019, reflecting an increased tax impact in the latter years.

Interest Burden

Interest burden showed a generally downward trend over the five-year span. Beginning at 0.88 in 2015, it decreased to 0.80 in 2019, with minor fluctuations in between. The ratio peaked at 0.91 in 2017 but overall indicates a gradual increase in interest expense relative to earnings before interest and taxes (EBIT).

EBIT Margin

The EBIT margin displayed considerable variability across the years. It started at 9.82% in 2015, dipped to a low of 8.31% in 2016, then improved markedly to 13.65% in 2017. A slight decrease followed to 12.93% in 2018, before falling more substantially to 9.5% in 2019. This pattern suggests fluctuating operating profitability with a peak in 2017.

Net Profit Margin

Net profit margin also experienced notable changes. Beginning at 5.93% in 2015, it fell to 4.57% in 2016 but rose again to 5.99% in 2017. A significant increase to 9.19% occurred in 2018, followed by a decline to 6.07% in 2019. These variations imply variable bottom-line profitability, with the highest margin in 2018.