Marriott International Inc. (NASDAQ:MAR)

The analysis of the financial ratios over the examined quarters reveals several noteworthy patterns in operational efficiency and asset utilization.

Net Fixed Asset Turnover

This ratio exhibits a marked decline from early 2016 through the end of 2016, dropping sharply from approximately 14.15 to around 6.36, indicating a significant reduction in the efficiency of net fixed assets in generating revenue. However, from 2017 onward, there is a gradual recovery and stabilization of the ratio, fluctuating within the range of approximately 8.94 to 12.77 through 2017, and maintaining a steady trend around 10.5 to 11.0 until early 2020. This suggests improved asset utilization after the initial downturn in 2016, with consistent performance maintained through the subsequent years.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

When operating lease right-of-use assets are included, the ratio mirrors the initial decline observed in the basic net fixed asset turnover ratio during 2016. Post-2018, the ratio remains relatively lower compared to the base net fixed asset turnover, declining notably to values around 7.0 to 7.8 by early 2020. This indicates that inclusion of lease assets impacts the efficiency measurement, potentially reflecting increased leased asset use or changes in asset accounting standards, resulting in lower turnover ratios compared to net fixed assets alone.

Total Asset Turnover

The total asset turnover ratio demonstrates a similar pattern to net fixed asset turnover in the initial periods, plummeting from 2.41 in the first quarter of 2016 to 0.61 by the third quarter of 2016. Subsequently, it shows a period of gradual recovery through 2017, rising to roughly 0.96 by the fourth quarter. From 2018 to early 2020, the ratio remains relatively stable, fluctuating within a narrow band from approximately 0.81 to 0.92. This trend indicates a rebound in the company’s ability to effectively use its total assets to generate revenue after a significant dip, with consistent operational performance maintained thereafter.

Equity Turnover

This ratio presents a pronounced upward trajectory throughout the available period. Starting from a value of 2.62 in late 2016, the equity turnover increases steadily, reaching 6.14 by the end of 2017 and continuing to rise sharply in the following years. By the fourth quarter of 2019, the ratio reaches an elevated level of 29.83, reflecting a substantial increase in revenue generated per unit of equity. This pattern suggests significant improvements in equity utilization, possibly driven by increased leverage, operational growth, or enhanced capital efficiency. However, data for some periods, including early 2016 and early 2020, are missing, which limits a full assessment of the trend continuity.

Overall, the quarter-to-quarter data indicate a recovery and stabilization phase in asset efficiency ratios following a sharp decline in 2016. The more recent volatile and increasing equity turnover points to a strategic shift potentially focused on maximizing equity use, albeit with caution needed due to incomplete data and the impact of asset accounting changes reflected in the adjusted net fixed asset turnover ratios.

The analysis of the quarterly financial data reveals several notable trends in revenues, property and equipment, and net fixed asset turnover over the period under review.

Revenues

Revenues exhibit a pattern of growth from the first quarter of 2016 through the end of 2017, peaking in December 2016 and maintaining elevated levels through 2017. Beginning in 2018, revenues display some volatility with declines and recoveries in alternating quarters. The year 2019 shows relative stability in revenue levels, though no substantial growth is apparent. A significant decline is apparent in the first quarter of 2020, marking a notable decrease compared to preceding quarters.

Property and Equipment, Net

The net value of property and equipment shows an initial increase up to the third quarter of 2016, followed by a marked decrease during the subsequent quarters of 2016 and continuing through 2017. From 2018 to early 2020, the value remains relatively stable with minor fluctuations, indicating limited capital expenditure or asset disposals during this period.

Net Fixed Asset Turnover

This ratio experiences a steep decline from early 2016 through the third quarter of 2016, inversely related to the surge in property and equipment values during the same period. Post this decline, the ratio steadily improves from late 2016 onward, reaching consistent levels above 10.5 from 2018 through the first quarter of 2020. This improvement indicates more efficient utilization of fixed assets in generating revenues over time despite fluctuations in asset values.

In summary, the data suggest that while revenues faced variability and a notable downturn at the start of 2020, fixed asset investments stabilized after a prior period of adjustment. The company's efficiency in using its fixed assets to generate revenue improved consistently after 2016, maintaining healthier asset turnover ratios despite evolving revenue trends.

Revenues

The quarterly revenue figures demonstrate a general pattern of fluctuation with underlying incremental growth in the earlier periods. From March 2016 through December 2017, revenue increased overall, peaking notably in the last quarter of 2016 and maintaining an upward trend through 2017. Subsequently, revenues show variability with declines in the first quarter of 2018 followed by modest recoveries within that year and consistent results in 2019. However, a notable decline is observed in the first quarter of 2020, indicating a contraction compared to prior periods.

Property and Equipment, Net

The net value of property and equipment including related lease assets displays significant fluctuations over the reported periods. Early 2016 figures start relatively low and suddenly escalate by the third quarter of 2016, reaching more than double the prior values. This elevated level decreases progressively through 2017 and stabilizes somewhat in 2018. A marked increase appears again in the first quarter of 2019, with values remaining high through 2019 before experiencing a decline in the first quarter of 2020. This pattern suggests substantial capital investment phases and possible disposals or revaluations across the timeframe.

Net Fixed Asset Turnover Ratio

This ratio illustrates the efficiency in generating revenues from net fixed assets, including lease-related components. The ratio starts very high in early 2016, then sharply decreases by the third quarter of 2016, indicating a drop in efficiency coinciding with the rise in asset base. From late 2016 through 2017, the ratio gradually improves, moving toward earlier levels, reflecting enhanced utilization of fixed assets. Throughout 2018, the ratio shows a steady decline, possibly due to increased asset base without proportional revenue increases. In 2019, the ratio is relatively stable but at a lower level than in early 2016, suggesting consistent but lower asset turnover. An increase in the first quarter of 2020 hints at a slight improvement in asset utilization despite the revenue decline.

Summary

The data reveals that changes in revenues are closely connected to fluctuations in the company's asset base, with periods of significant capital investment influencing asset valuation and turnover efficiency. Revenue growth and contractions appear to have a lagging relationship with capital expenditures, where major increases in asset values temporarily reduce asset turnover ratios. The decline in revenues in early 2020 may reflect external impacts affecting business activity. Overall, asset management and revenue generation efficiency exhibit cyclical behavior aligned with investment phases and changing market conditions.

Revenue Trends

The quarterly revenues exhibit a generally stable yet fluctuating pattern over the observed periods. From the first quarter of 2016 through the end of 2017, revenues mostly increased, peaking at the fourth quarter of 2016 with a notable surge to 5456 million US dollars, followed by a relatively steady range in subsequent quarters around the mid-5000s. However, starting in 2018, the revenues show some volatility with declines and recoveries, notably dropping under 5000 million in the first quarter of 2018 and again in early 2019, before slightly recovering later in 2019. By the first quarter of 2020, a downward movement is evident, with revenues falling to 4681 million, the lowest observed since the start of the period.

Total Assets Evolution

Total assets depicted a significant surge in the third quarter of 2016, jumping from 6650 million to 25002 million US dollars, and then stabilizing at a high level around the 23,000 to 25,000 million range subsequently. This marked increase suggests a substantial acquisition or revaluation event in mid-2016. From late 2016 onward through early 2020, total assets have remained relatively stable with minor quarter-to-quarter variations but maintaining the elevated asset base established in 2016.

Total Asset Turnover Ratio Analysis

The total asset turnover ratio demonstrates an inverse movement corresponding to the surge in total assets. Initially high at 2.41 and 2.25 in the first two quarters of 2016, the ratio drops dramatically to approximately 0.61 in the third quarter of 2016 following the asset base increase, indicating the assets were not yet fully leveraged to generate proportionate revenues. Post-2016, the ratio gradually improves, rising to around 0.96 by the end of 2017. However, from 2018 onward, this ratio declines moderately, stabilizing in the range of 0.83 to 0.88, and then slightly dropping to 0.81 in early 2020, reflecting a lower efficiency in utilizing assets to generate revenues relative to the early periods.

Overall Insights

The data suggest the company underwent a significant expansion or change in asset structure in late 2016, fundamentally altering its operational scale. While revenue growth temporarily accelerated during this period, subsequent years show fluctuating revenues amid a high asset base. The declining asset turnover ratio post-expansion indicates challenges in maintaining previous levels of operational efficiency. The most recent quarter's revenue decline and further drop in asset turnover may highlight emerging pressures on business performance or external market conditions impacting asset utilization and revenue generation efficiency.

The financial analysis over the presented quarters reveals several notable trends in revenues, shareholders’ equity, and equity turnover.

Revenues

Revenues exhibit a generally increasing trend from early 2016 through late 2019, rising from approximately $3.8 billion in the first quarter of 2016 to a peak around $5.4 billion in the fourth quarter of 2019. However, a decline is observed in the first quarter of 2020, where revenues decreased to about $4.7 billion, indicating a downturn after a prolonged period of growth.

Shareholders’ Equity (Deficit)

Shareholders’ equity showed considerable fluctuation over the periods. Starting with a significant deficit near -$3.7 billion in March 2016, there was a noteworthy recovery to positive equity by the third quarter of 2016, reaching approximately $5.8 billion. Subsequent quarters saw a gradual decline in equity, consistently decreasing from over $5 billion in early 2017 to about $700 million by the end of 2019, and ultimately nearly neutralizing to a slight deficit of -$20 million in March 2020. This suggests a sustained reduction in net asset value during this timeframe.

Equity Turnover

Equity turnover ratios demonstrated a strong upward trend from the third quarter of 2016 onward. Starting at 2.62, the ratio increased steadily to reach 29.83 by the first quarter of 2020. This escalation indicates increasing efficiency in utilizing shareholders’ equity to generate revenues, particularly notable given the concurrent decline in equity magnitude. The rising turnover ratio reflects a higher revenue generation per unit of equity, which might be attributed to operational improvements or changes in capital structure.

In summary, the company showed revenue growth and improving equity utilization efficiency until late 2019, accompanied by a declining equity base. The initial quarter of 2020 marks a reversal in revenue growth and a near neutral equity position, which may suggest emerging financial pressures or external challenges impacting performance.