Marriott International Analysis

Marriott International is an operator, franchisor, and licensor of hotels and timeshare properties under numerous brand names at different price and service points. Co. also operates, markets, and develops residential properties and provides services to home/condominium owner associations.Co. has three segments: North American Full-Service, North American Limited-Service and International. At year-end 2016, Co. operated 1,821 properties (521,552 rooms), 48 properties (10,933 rooms) under long-term lease agreements, and 22 properties (9,906 rooms) that it owns. In addition, Co. operated 44 home and condominium communities (5,179 units) for which it manages the related owners' associations.

Ratios

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Current ratio - Marriott’s ability to pay for short term and long term obligations is quite dangerous at 0.65 in 2016. The company keeps it stable for years which can be seen that in 2013 with 0.71, however, the ratio decreased in the two following years and kept it stable at 0.65 in 2015. It could interpret that the company is not in good financial health, it does not necessarily mean that it will go bankrupt. It just indicates that a company’s liabilities are greater than its assets and suggests that the company in question would be unable to pay off its obligations if they came due at that point.

Quick Ratio - The quick ratio is a liquidity ratio that measures a company's ability, using its quick assets, to pay off its current debt as they come due. In 4 years from 2013 to 2016, Marriott also had the stable quick ratio with the range around 0.4 showing that the company had a little bit difficulty facing with it quick assets paid off for it current debt.

Cash ratio - cash ratio is most commonly used as a measure of company's liquidity. Since the cash ratio is small which was at 0.03 in 2014 and 2015 and increased 0.17 in 2017, we can say that the company has more current liabilities than cash. Marriott would stay in difficulty when the short-term debt needs to pay off by cash. Marriott focuses on the strategy to have the low cash reserve. In the hotel industry, it is good to operate with higher current liabilities and lower cash reserves. Based on the ratio, it can be seen that Marriot is on it right strategy of high liabilities.

Total asset turnover - Marriott operated really good from 2013 to 2015 with high total asset turnover range from 1.93 to 2.24. these high ratios imply that the company is generating more revenue per dollar of assets. Even though there was a downfall in 2016 at 1.13, the company still operated good and the ratio in the future is estimated to increase in the next few years.

Total debt ratio - The debt ratio compares a company's total debt to its total assets. From 2013 to 2015, Marriott’s debt ratio stayed around 1.3 then raised to 1.59 in 2015, which showed that the risk the company had to face was high. In 2016, the debt ratio decreased significantly to 0.78 which is a good sign to show that the company is using less leverage and has a strong equity position.