Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Aggregate Accruals
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Profitability Ratios (Summary)
Marriott International Inc., profitability ratios
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
- Gross Profit Margin
- The gross profit margin demonstrated a generally positive trend from 2015 to 2018, increasing from 14.66% to 17.7%. However, in 2019, there was a notable decline to 15.34%, indicating some pressure on the company's cost of goods sold relative to sales or changes in pricing strategies.
- Operating Profit Margin
- The operating profit margin exhibited fluctuations throughout the period. It decreased from 9.32% in 2015 to 8.01% in 2016, then improved significantly to a peak of 11.4% in 2018. The margin contracted again in 2019 to 8.58%, reflecting variable operational efficiencies or increased operating expenses during the later years.
- Net Profit Margin
- The net profit margin followed a similar pattern to the operating margin, starting at 5.93% in 2015 and dipping to a low of 4.57% in 2016. It then rose consistently to 9.19% by 2018, suggesting improved bottom-line profitability before experiencing a moderate decline to 6.07% in 2019. This indicates volatility in net income possibly linked to non-operating items or tax impacts.
- Return on Equity (ROE)
- Return on equity data was not available for 2015. From 2016 onwards, ROE showed a dramatic upward trajectory, surging from 14.56% to a remarkable 181.08% in 2019. This sharp rise indicates an extraordinary increase in shareholder returns, potentially driven by higher net income levels combined with leveraged equity or significant changes in equity structure.
- Return on Assets (ROA)
- ROA experienced high volatility over the period. It started at a strong 14.12% in 2015, then dropped steeply to 3.23% in 2016. Following this, the metric gradually improved to 8.05% in 2018 but again fell to 5.08% in 2019. The fluctuations suggest variations in asset utilization efficiency and profitability relative to the company's total asset base.
Return on Sales
Return on Investment
Gross Profit Margin
Marriott International Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue Trend
- The revenues of the company increased steadily from 2015 to 2017, rising from 14,486 million USD in 2015 to 22,894 million USD in 2017. However, there was a decline in revenues in 2018 to 20,758 million USD, followed by a slight increase in 2019 to 20,972 million USD, indicating some volatility after a period of strong growth.
- Gross Profit Analysis
- Gross profit showed a consistent increase from 2015 through 2017, reaching a peak of 3,702 million USD in 2017. This was followed by a minor decrease in 2018 to 3,674 million USD, and a more notable decline in 2019 to 3,217 million USD. The peak in gross profit coincides with the highest revenue year, suggesting a correlation between revenue growth and gross profit.
- Gross Profit Margin Ratio
- The gross profit margin improved from 14.66% in 2015 to a high of 17.7% in 2018, indicating enhanced profitability and potentially improved operational efficiency during this period. However, the margin declined to 15.34% in 2019, which aligns with the declining gross profit and more modest revenue change in that year.
- Overall Insights
- The data reflect strong growth in revenue and profitability from 2015 to 2017, accompanied by improvements in gross profit margin. The peak performance occurred in 2017-2018, after which there was a downturn in both gross profit and margin despite relatively stable revenues in 2019. This suggests emerging pressures on profitability in the later period, possibly due to increased costs or other operational challenges.
Operating Profit Margin
Marriott International Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The data shows key financial metrics including operating income, revenues, and operating profit margin over the five-year period ending in 2019.
- Operating Income
- Operating income demonstrated a fluctuating trend. Starting at $1,350 million in 2015, it showed a slight increase to $1,368 million in 2016. A substantial rise occurred in 2017, reaching $2,359 million, maintaining a similar level in 2018 at $2,366 million. However, there was a notable decline in 2019 to $1,800 million, indicating potential operational challenges or increased costs impacting profitability that year.
- Revenues
- Revenues exhibited consistent growth from 2015 through 2017, increasing from $14,486 million to $22,894 million. In 2018, there was a decline to $20,758 million, followed by a slight recovery to $20,972 million in 2019. The dip in revenues after 2017 could suggest market saturation, competitive pressures, or other external factors influencing top-line performance.
- Operating Profit Margin
- The operating profit margin fluctuated over the period. It started at 9.32% in 2015, decreasing to 8.01% in 2016. The margin improved significantly in the subsequent two years, reaching 10.3% in 2017 and peaking at 11.4% in 2018. By 2019, it decreased again to 8.58%. This pattern suggests that although profitability relative to revenues improved substantially in 2017 and 2018, operational efficiency or cost control weakened in 2019, affecting margin performance.
Overall, the data depicts a period of growth and improved profitability up to 2018, with a contraction in both operating income and margin in 2019 despite relatively stable revenues. This combination points to potential operational or market-related issues impacting profitability towards the end of the observed period.
Net Profit Margin
Marriott International Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income experienced an overall upward trend from 2015 to 2018, increasing from 859 million USD in 2015 to a peak of 1,907 million USD in 2018. However, in 2019, net income declined significantly to 1,273 million USD. This drop indicates a potential decrease in profitability or increased expenses during the last year of the period analyzed.
- Revenues
- Revenues showed a strong growth trajectory from 2015 through 2017, rising from 14,486 million USD in 2015 to a high of 22,894 million USD in 2017. This was followed by a decline in 2018 to 20,758 million USD, with a slight increase to 20,972 million USD in 2019. The partial recovery in 2019 revenues suggests some stabilization after the prior year's decrease.
- Net Profit Margin
- The net profit margin fluctuated over the period with no consistent directional trend. It started at 5.93% in 2015, dropped to 4.57% in 2016, then rose to 5.99% in 2017. The margin peaked notably at 9.19% in 2018 before declining again to 6.07% in 2019. The peak in 2018 corresponds with the highest net income, indicating improved profitability efficiency that year, followed by a reduction in margin in 2019 aligning with the decrease in net income.
Return on Equity (ROE)
Marriott International Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Shareholders’ equity (deficit) | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
ROE = 100 × Net income ÷ Shareholders’ equity (deficit)
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income exhibits notable fluctuations over the five-year period. Beginning at 859 million US dollars in 2015, it experienced a slight decline in 2016 to 780 million. Subsequently, net income increased significantly, reaching a peak of 1,907 million in 2018 before declining to 1,273 million in 2019. This pattern suggests a period of strong profitability growth until 2018, followed by a reduction in earnings the subsequent year.
- Shareholders’ Equity (Deficit)
- The shareholders’ equity position shows considerable improvement from 2015 to 2016, shifting dramatically from a deficit of 3,590 million US dollars to a positive 5,357 million. Following this, equity steadily decreased each year, falling to 703 million by the end of 2019. Despite remaining positive after 2015, the decreasing trend indicates a potential decline in net assets available to shareholders over the latter years.
- Return on Equity (ROE)
- The ROE data is incomplete for 2015 but starts at 14.56% in 2016 and demonstrates a substantial upward trend, climbing sharply to 181.08% by 2019. This dramatic increase in ROE suggests that the company is generating significantly higher returns on its equity base over time. However, this must be interpreted cautiously due to the sharp decline in shareholders’ equity, which can exaggerate the ROE metric.
- Overall Analysis
- The financial data reveals a complex dynamic where increasing profitability and extremely high ROE occur alongside a declining equity base. The typical interpretation is that profitability has improved substantially, but the shrinking equity suggests increased leverage or asset base reduction. The peak net income in 2018 and subsequent decline in 2019 may indicate emerging challenges or market conditions impacting earnings. Attention should be given to the sustainability of returns given the equity trend.
Return on Assets (ROA)
Marriott International Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 2019 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data indicates fluctuating performance over the five-year period analyzed. Net income exhibits an overall increasing trend from 2015 to 2018, rising from 859 million USD to a peak of 1907 million USD in 2018, followed by a decline to 1273 million USD in 2019. This suggests strong profitability growth initially, with a significant downturn in the final year of the data.
Total assets show a considerable increase from 6082 million USD in 2015 to over 24 billion USD in 2016, remaining relatively stable in subsequent years with slight fluctuations but maintaining an elevated level above 23 billion USD. This sharp increase between 2015 and 2016 points to a major asset acquisition or reclassification event, after which asset base stability is observed.
The Return on Assets (ROA) reflects the company's efficiency in generating profit from its asset base. ROA declines sharply from 14.12% in 2015 to 3.23% in 2016, coinciding with the large asset increase and comparatively lower net income, indicating reduced asset utilization efficiency. Thereafter, ROA improves steadily to 8.05% by 2018 before declining again to 5.08% in 2019. This pattern aligns with the fluctuations in net income and suggests variable operational efficiency over time.
- Net Income
- Initial growth over four years, peaking in 2018, followed by a notable decline in 2019.
- Total Assets
- Sharp increase from 2015 to 2016, then relative stability with minor fluctuations through 2019.
- Return on Assets (ROA)
- Significant drop in 2016, gradual recovery until 2018, and decreasing again in 2019, mirroring net income trends and asset changes.
Overall, the data reveals that while asset growth was substantial, especially between 2015 and 2016, the company's ability to leverage those assets for profitability varied, showing peaks and troughs in financial efficiency and income generation through the period.