Marriott International Inc. (NASDAQ:MAR)

Current Ratio Trend

The current ratio exhibited a general upward movement from the first quarter of 2016 to early 2017, starting at 0.44 and peaking at 0.72 in the third quarter of 2016. Subsequently, it declined steadily throughout 2017 and 2018, reaching a low of 0.42 by the fourth quarter of 2018. In 2019, the ratio showed moderate volatility but maintained a range between 0.47 and 0.51. A notable increase occurred in the first quarter of 2020, with the ratio climbing to 0.62, indicating improved short-term liquidity for that period.

Quick Ratio Analysis

The quick ratio followed a pattern broadly similar to the current ratio, beginning at 0.38 in the first quarter of 2016 and increasing to a peak of 0.56 in the second quarter of 2016. After this peak, the ratio gradually decreased, with a minor rebound in mid-2019, fluctuating mostly between 0.38 and 0.47 during 2018 and 2019. A substantial improvement was recorded in the first quarter of 2020, where the quick ratio reached 0.59, reflecting better management of liquid assets relative to current liabilities.

Cash Ratio Developments

The cash ratio displayed considerable variability, starting from a low base of 0.03 in the first quarter of 2016 and rising sharply to 0.21 by the second and third quarters of 2016. Following this increase, the ratio generally declined, stabilizing around 0.05 to 0.11 with occasional fluctuations throughout 2017 to 2019. The first quarter of 2020 saw an exceptional spike to 0.27, the highest value in the series, suggesting a significant increase in cash and cash equivalents relative to current liabilities at that time.

Overall Liquidity Insights

The liquidity ratios collectively reveal an initial improvement in short-term financial health during early 2016, followed by a period of decline and stabilization at relatively moderate liquidity levels through 2017 to 2019. The sharp increases in all three ratios during the first quarter of 2020 imply a strategic or reactive adjustment to enhance liquidity, possibly in response to emerging market uncertainties or operational demands. Despite the fluctuations, the ratios consistently remained below 1, indicating that current liabilities exceeded liquid assets but showcased a strengthening position at the beginning of 2020.

Current assets

The current assets exhibit a generally fluctuating pattern over the observed periods. They increased substantially early on, reaching a peak in the third quarter of 2016, followed by a decline into early 2017. Throughout 2017 and 2018, current assets remained relatively stable with minor decreases. From 2019 onwards, the values showed a modest upward trend, culminating in a notable rise by the first quarter of 2020, where they reached the highest level in the series.

Current liabilities

Current liabilities consistently increased over the time frame, starting from a lower base in the first quarter of 2016. There was a marked rise especially from 2016 through 2017, with liabilities steadily growing through 2018. While slight periodic decreases occurred, the overall movement trended upward, peaking late in 2019 before a marginal decline appeared by the first quarter of 2020.

Current ratio

The current ratio, which is the proportion of current assets to current liabilities, remained below 1.0 throughout the period, indicating that current liabilities exceeded current assets consistently. The ratio showed an initial improvement from 0.44 to 0.72 up to late 2016, suggesting better short-term liquidity. However, following this peak, the ratio generally declined or stabilized at lower levels, fluctuating mostly between 0.42 and 0.51 for several quarters. Toward the end of the period observed, there is a slight recovery to 0.62, aligning with the rise in current assets seen in early 2020.

The analysis of the quarterly financial data reveals several notable trends regarding the liquidity position and current liabilities over the examined periods.

Total Quick Assets

Total quick assets show a general upward trend over the timeline. Starting at $1,242 million in March 2016, they significantly increased to peak at $3,828 million by March 2020. Despite some fluctuations, such as a temporary dip in mid-2017 and late 2018, the overall movement reflects a strengthening in liquid assets available for meeting short-term obligations.

Current Liabilities

Current liabilities demonstrate a steady increase in the periods observed. From $3,247 million in March 2016, liabilities rose consistently, reaching $6,516 million by March 2020. There are some minor fluctuations, but the general pattern indicates growing obligations that could pressure the company's short-term liquidity.

Quick Ratio

The quick ratio, representing the company’s immediate liquidity by comparing quick assets to current liabilities, has exhibited variability with a slight downward pressure over several years. Beginning at 0.38 in March 2016, it improved to peaks around 0.56 and 0.53 in the middle of 2016 but generally declined to around 0.38 by December 2018. After some modest recovery in 2019, the ratio dropped again to 0.39 in December 2019 before increasing significantly to 0.59 in March 2020. This final improvement indicates enhanced short-term liquidity relative to immediate liabilities by the end of the period assessed.

Overall, while total quick assets have grown considerably, the rise in current liabilities has outpaced this growth for much of the period, leading to a relatively constrained quick ratio for most quarters. The marked increase in the quick ratio in the last reported quarter suggests a more favorable liquidity position entering 2020, potentially improving the company's ability to cover its short-term obligations without relying on inventory or long-term assets.

Total Cash Assets

The total cash assets experienced significant fluctuations throughout the observed periods. Starting at a very high level of 99,679 million US dollars in the first quarter of 2016, this figure sharply dropped to values ranging roughly between 176 and 1,078 million US dollars in subsequent quarters. From mid-2016 onward, total cash assets mostly stabilized within the hundreds of millions range, with occasional minor increases and decreases. Notably, there was a marked increase in cash assets to 1,760 million US dollars in the first quarter of 2020, suggesting a substantial cash buildup at the onset of that period.

Current Liabilities

Current liabilities showed a progressive upward trend over the analyzed timeframe. Beginning at 3,247 million US dollars in the first quarter of 2016, current liabilities generally increased, reaching a peak of 6,677 million US dollars in the fourth quarter of 2019. The values remained elevated near the 6,500 million mark in early 2020, indicating an expansion in short-term obligations over time.

Cash Ratio

The cash ratio, representing the proportion of cash assets to current liabilities, demonstrated a decreasing trend from the start of the period until late 2019. It began at 0.03 in the first quarter of 2016, reached a peak near 0.21 in mid-2016 and early quarters, and then steadily declined to values around 0.03 to 0.06 by the end of 2019. However, a notable rebound was observed in the first quarter of 2020, where the ratio rose sharply to 0.27, reflecting a significantly improved liquidity position relative to current liabilities.

Overall Insights

The analysis reveals that while current liabilities increased substantially over the observed quarters, cash assets generally remained stable at much lower levels compared to the initial outlier in early 2016. This resulted in a declining cash ratio, suggesting a gradual reduction in liquidity coverage of short-term obligations. The exceptional surge in both cash assets and the cash ratio in the first quarter of 2020 indicates a strategic accumulation of cash or liquidity resources, potentially as a response to emerging operational or market conditions during that period.