Marriott International Inc. (NASDAQ:MAR)

Receivables turnover

The receivables turnover ratio has shown a declining trend over the observed period. It decreased from 13.21 in 2015 to 8.79 in 2019, indicating that the company is collecting its receivables at a slower rate year over year.

Payables turnover

The payables turnover ratio fluctuated over the years but generally remained stable with a slight increase towards the end. It started at 20.85 in 2015, reached a low of 21.03 in 2016, then fluctuated between 22.27 and 24.66, ending at 24.66 in 2019. This indicates relatively consistent, but slightly extended, payment practices to suppliers.

Working capital turnover

No data was available for working capital turnover for any of the years, thus no trend or analysis can be made in this area.

Average receivable collection period

The average receivable collection period increased steadily from 28 days in 2015 to 42 days in 2019. This growth indicates that on average, the company is taking longer to collect payments from its customers, which may affect cash flow.

Average payables payment period

The average payables payment period remained relatively stable, fluctuating mildly between 15 and 18 days over the five years. It started at 18 days in 2015 and ended at 15 days in 2019, suggesting the company has consistently maintained a short payment cycle toward its suppliers.

Revenues

The revenues exhibited an upward trend from 2015 through 2017, increasing from $14,486 million to $22,894 million. However, in 2018 revenues declined to $20,758 million and showed minimal recovery in 2019, reaching $20,972 million. This suggests that after significant growth during the initial years, revenue growth moderated and faced some challenges starting in 2018.

Accounts Receivable, Net

The net accounts receivable consistently increased each year, rising from $1,097 million in 2015 to $2,386 million in 2019. This steady growth in receivables suggests an expanding amount of credit extended to customers, possibly reflective of the overall scaling of operations or shifts in credit terms.

Receivables Turnover

The receivables turnover ratio declined from 13.21 in 2015 to 8.79 in 2019. This indicates a progressive slowdown in the efficiency of collecting receivables over the period, implying that on average, receivables were outstanding for longer durations by 2019 compared to 2015. The declining turnover ratio aligns with the increasing accounts receivable balance and may call for closer attention to credit policies or collection practices.

The financial data reveals several key trends in cost management and payables efficiency over the five-year period.

Cost of revenues

The cost of revenues increased substantially from 2015 to 2017, rising from $12.4 billion to $19.2 billion, indicating a significant growth in expenditure related to generating revenue during this period. However, a decline occurred in 2018, bringing the cost down to $17.1 billion, followed by a slight increase in 2019 to $17.8 billion. This suggests a possible effort to control costs or changes in operational activities after the peak in 2017.

Accounts payable

Accounts payable showed a steady but modest increase from $593 million in 2015 to $780 million in 2017, then a slight decrease over the next two years to $720 million by 2019. This pattern indicates that while short-term liabilities to suppliers initially grew alongside the cost of revenues, there was some reduction or improved management of payables in the latter years.

Payables turnover ratio

The payables turnover ratio, which measures how quickly the company pays its suppliers, remained relatively stable around 20.85 to 21.03 in 2015 and 2016 but saw a noticeable increase in 2017 to 24.61. After a drop to 22.27 in 2018, it rose again to 24.66 in 2019. This trend indicates a generally improved or accelerated payables cycle, meaning the company increasingly paid off its accounts payable faster during 2017 and 2019 compared to prior years.

Overall, the period reflects fluctuating costs related to revenue generation, combined with a tendency towards more efficient management of payable obligations in the later years, particularly reflected in the higher payables turnover ratio. The company appears to have made efforts to control cost growth post-2017, while also optimizing the payment cycle to suppliers.

The financial data reveals notable trends over the five-year period from 2015 to 2019.

Working Capital

Working capital consistently remained negative throughout the period, indicating that current liabilities exceeded current assets. The deficit deepened from -1,849 million USD in 2015 to a peak negative value of -3,731 million USD in 2018, before slightly improving to -3,550 million USD in 2019. This trend suggests potential liquidity constraints or a strategic choice to operate with a negative working capital position.

Revenues

Revenues showed an overall upward trajectory, increasing from 14,486 million USD in 2015 to a high of 22,894 million USD in 2017. However, 2018 and 2019 saw a decline, with revenues dropping to 20,758 million USD and 20,972 million USD respectively. Despite the slight reduction after 2017, revenues in 2019 remained significantly above the 2015 level, indicating overall growth in the company’s sales over the five-year span.

Working Capital Turnover

No data was provided for working capital turnover ratios, limiting the ability to analyze the efficiency with which the company utilized its working capital to generate revenue.

In summary, the company experienced strong revenue growth until 2017, followed by a moderate decline, while operating consistently with negative working capital, suggesting either aggressive liability management or potential short-term liquidity risks. Further investigation is recommended to assess the operational efficiency and implications of the negative working capital position on the company’s financial health.

Receivables Turnover

The receivables turnover ratio displays a declining trend over the five-year period. Starting at 13.21 in 2015, it decreased to 10.09 in 2016, then slightly recovered to 11.54 in 2017, before continuing its downward trajectory to 9.76 in 2018 and further to 8.79 in 2019. This pattern suggests a gradual reduction in the efficiency with which receivables are collected.

Average Receivable Collection Period

The average collection period exhibits an increasing trend, moving from 28 days in 2015 to 36 days in 2016. It then slightly improved to 32 days in 2017 but subsequently lengthened again to 37 days in 2018 and further extended to 42 days in 2019. This indicates that the time taken on average to collect receivables has been elongating over the evaluated timeframe.

Overall Analysis

The inverse relationship between receivables turnover and the average collection period is evident and consistent with financial theory since a lower turnover ratio corresponds to a longer collection period. The data collectively point to a declining efficacy in the management of receivables over the period, potentially impacting working capital management and liquidity.

Payables Turnover

The payables turnover ratio exhibited an overall increasing trend over the five-year period. Starting at 20.85 in 2015, the ratio rose modestly to 21.03 in 2016, followed by a more significant increase to 24.61 in 2017. After a slight decline to 22.27 in 2018, the ratio again increased to 24.66 in 2019. This pattern suggests an improvement in the company's efficiency in paying its suppliers over time, with occasional fluctuations.

Average Payables Payment Period

The average payables payment period demonstrated a generally decreasing trend, indicating a faster payment cycle. The period shortened from 18 days in 2015 to 17 days in 2016, and then to 15 days in 2017. There was a slight increase to 16 days in 2018, followed by a return to 15 days in 2019. This reduction in payment days aligns inversely with the payables turnover ratio trends, reinforcing the conclusion that the company has been settling its payables more quickly across the reported years.