Marriott International Inc. (NASDAQ:MAR)

Debt to Equity Ratio

The debt to equity ratio displayed a notable upward trend from 2016 to 2019, starting at 1.59 in 2016 and escalating significantly to 15.56 in 2019. Including operating lease liabilities, the ratio increased slightly more, reaching 17 in 2019. This indicates a substantial rise in financial leverage through increased debt relative to shareholders' equity over the period.

Debt to Capital Ratio

The debt to capital ratio remained relatively stable and low, ranging from 0.61 in 2016 to 0.94 in 2019. The inclusion of operating lease liabilities did not alter this figure. This suggests that despite the increasing debt relative to equity, the overall capital structure did not shift dramatically in terms of debt proportion.

Debt to Assets Ratio

The debt to assets ratio experienced a moderate increase, rising from 0.35 in 2016 to 0.44 in 2019, with a slightly higher figure of 0.48 when including operating lease liabilities in 2019. This points to a gradual increase in leverage relative to total assets, with operating leases contributing to a modest additional burden.

Financial Leverage

Financial leverage grew substantially from 4.51 in 2016 to a high level of 35.63 in 2019, reflecting increased reliance on debt financing. This rapid escalation aligns with the sharp increase in the debt to equity ratio and signals heightened financial risk.

Interest Coverage Ratio

The interest coverage ratio exhibited variability, starting at 8.51 in 2015 and declining to 5.06 in 2019, with fluctuations in between. After peaking at 10.85 in 2017, it generally trended downwards, indicating that the company's ability to meet interest expenses from earnings became more constrained by the end of the period.

Fixed Charge Coverage Ratio

This ratio followed a similar trajectory to interest coverage, decreasing from 5.11 in 2015 to 3.76 in 2019, with a peak in 2017 at 6.88. The decreasing trend suggests a growing challenge in covering fixed financial obligations, including interest and lease payments, potentially raising concerns about financial flexibility.

The financial data reveals notable trends in the company's debt levels, equity position, and leverage ratios over the five-year period from 2015 to 2019.

Total Debt

The total debt increased substantially, more than doubling from 4,107 million US dollars in 2015 to 10,940 million US dollars in 2019. This consistent upward trajectory indicates a rising reliance on borrowed funds over the years.

Shareholders’ Equity (Deficit)

The shareholders’ equity exhibited significant volatility. Starting with a deficit of -3,590 million US dollars in 2015, it recovered into positive territory by 2016 at 5,357 million, but then showed a declining trend to 703 million by 2019. This downward shift in equity after 2016 suggests a weakening in the company’s net asset base over this period.

Debt to Equity Ratio

Corresponding with the equity fluctuations, the debt to equity ratio escalated markedly. It rose from 1.59 in 2016 to a very high 15.56 in 2019. This sharp increase reflects a substantial amplification in financial leverage, indicating heightened risk due to increased debt levels relative to shareholders' equity.

Overall, the analysis points to growing financial leverage alongside declining equity strength, which could have implications for the company’s financial stability and risk profile going forward.

Total debt (including operating lease liability)

The total debt exhibits a pronounced upward trend over the five-year period. Starting from US$4,107 million in 2015, the amount more than doubled by 2016, reaching US$8,506 million. There is a slight decrease in 2017 to US$8,238 million, followed by continued growth in 2018 and 2019, culminating at US$11,952 million. This steady increase indicates an escalating reliance on debt financing or higher commitments under operating lease liabilities.

Shareholders’ equity (deficit)

Shareholders’ equity shows significant volatility and an overall declining trajectory after 2016. Beginning with a deficit of US$3,590 million in 2015, it turned positive in 2016 with a value of US$5,357 million. However, this upward movement was not sustained, as equity decreased to US$3,731 million in 2017, then further declined to US$2,225 million in 2018, and approached near deficit again by 2019 with US$703 million. This pattern suggests possible impacts from accumulated losses, distributions, or changes in asset valuation that eroded equity over time.

Debt to equity (including operating lease liability)

The debt to equity ratio reflects a significant increase in financial leverage across the available periods. The ratio commenced at 1.59 in 2016, increased to 2.21 in 2017, and accelerated sharply in 2018 to 4.2. By 2019, the ratio surged dramatically to 17, indicating a substantial imbalance between debt and equity. This steep increase corresponds with the simultaneous rise in total debt and the compression of shareholders’ equity, underscoring growing financial risk and dependence on debt.

Total Debt

The total debt exhibited a general upward trend over the period from 2015 to 2019. Starting at approximately 4,107 million USD in 2015, total debt more than doubled by 2016, reaching 8,506 million USD. Although there was a slight decrease to 8,238 million USD in 2017, the debt level then increased again in subsequent years, culminating at 10,940 million USD in 2019. This indicates a substantial rise in the company's leverage over the five-year period.

Total Capital

Total capital showed considerable volatility during the same timeframe. It started at a relatively low level in 2015, around 517 million USD, followed by a significant spike to 13,863 million USD in 2016. After this sharp increase, total capital declined to 11,969 million USD in 2017 and continued a minor downward trend through 2018 and 2019, ending at 11,643 million USD. Despite the drop after 2016, the capital base remained substantially higher compared to 2015.

Debt to Capital Ratio

The debt to capital ratio demonstrated a pronounced shift in financial structure. In 2015, the ratio was very low at 7.94, likely due to the unusually low reported total capital. In 2016, the ratio sharply declined to 0.61, suggesting a strong equity position relative to debt after the surge in total capital. Over the following years, the ratio steadily increased, reaching 0.94 by 2019. This trend indicates a rising reliance on debt financing relative to the company’s capital base, moving towards a more leveraged financial posture.

Total Debt (Including Operating Lease Liability)

The total debt level exhibited a significant increase over the period from 2015 to 2019. Starting at 4,107 million USD in 2015, the value rose sharply to 8,506 million USD in 2016. Following this peak, there was a slight decline to 8,238 million USD in 2017, but the debt resumed its upward trend in subsequent years, reaching 9,347 million USD in 2018 and peaking at 11,952 million USD in 2019.

Total Capital (Including Operating Lease Liability)

Total capital showed considerable fluctuation across the same period. An anomaly appears in 2015 with a reported figure of only 517 million USD, which is unusually low compared to subsequent years. From 2016 onwards, total capital stabilizes between approximately 11,572 million USD and 13,863 million USD. The highest capital level was recorded in 2016 at 13,863 million USD, followed by a gradual decrease and then a modest rise again towards 2019, ending at 12,655 million USD.

Debt to Capital Ratio (Including Operating Lease Liability)

This ratio demonstrates a marked decline from 7.94 in 2015 to 0.61 in 2016, indicating a significant improvement in the capital structure relative to debt in that year. From 2016 onwards, the ratio increased steadily each year, rising to 0.69 in 2017, 0.81 in 2018, and reaching 0.94 in 2019. This trend suggests a gradual increase in leverage relative to total capital after 2016, approaching a more balanced but higher leveraged position by the end of 2019.

The analysis of the annual financial data reveals distinct trends related to the company's leverage and asset base over the five-year period.

Total Debt

Total debt increased significantly from US$4,107 million in 2015 to US$10,940 million in 2019. The highest growth was observed between 2015 and 2016, when debt more than doubled from US$4,107 million to US$8,506 million. After a slight decrease in 2017 to US$8,238 million, total debt resumed an upward trajectory, reaching a peak of US$10,940 million by 2019.

Total Assets

Total assets expanded markedly between 2015 and 2016, rising from US$6,082 million to US$24,140 million. This substantial increase was followed by a relatively stable asset base, maintaining levels between approximately US$23,600 million and US$25,000 million from 2017 through 2019. This indicates a significant asset growth initiative in the first two years with subsequent asset stabilization.

Debt to Assets Ratio

The debt to assets ratio exhibited a downward trend from 0.68 in 2015 to a low of 0.34 in 2017, reflecting a reduction in leverage relative to the asset base despite the rise in total debt. However, from 2017 onwards, the ratio increased gradually, reaching 0.44 in 2019. This increase indicates a growing proportion of debt relative to assets, suggesting a moderate rise in financial leverage in the latter years.

In summary, the company experienced a significant increase in both debt and assets early in the period, with debt growing at a faster pace initially but then stabilizing. The initial decline in the debt to assets ratio indicates improved financial leverage, likely attributable to substantial asset growth. However, the gradual increase in this ratio after 2017 suggests a cautious increase in leverage. These patterns may reflect strategic financing decisions aligned with investments in assets and growth objectives.

Total Debt (Including Operating Lease Liability)

The total debt exhibited a generally increasing trend over the five-year period. Starting from $4,107 million in 2015, it more than doubled by 2016, reaching $8,506 million. Subsequently, the debt slightly decreased to $8,238 million in 2017 but then showed consistent growth in the following years, peaking at $11,952 million by the end of 2019.

Total Assets

Total assets experienced a significant surge between 2015 and 2016, rising from $6,082 million to $24,140 million. After this sharp increase, asset levels remained relatively stable, ranging between approximately $23,696 million and $25,051 million from 2017 to 2019, indicating a stabilization phase following rapid expansion.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio showed a notable decline from 0.68 in 2015 to a low of 0.34 in 2017, indicating an improvement in the company's leverage relative to its asset base. However, this ratio began to increase thereafter, reaching 0.48 in 2019. This suggests a rising reliance on debt financing compared to assets during the last two years of the period under review.

Total Assets

The total assets of the company exhibited a substantial increase from 2015 to 2016, rising sharply from $6,082 million to $24,140 million. Following this significant jump, the asset base remained relatively stable with minor fluctuations, leveling off around $23,948 million in 2017 and $23,696 million in 2018, before increasing slightly to $25,051 million in 2019. This trend indicates a major asset acquisition or restructuring event between 2015 and 2016, followed by a period of moderate stability and slight growth.

Shareholders’ Equity (Deficit)

The shareholders’ equity position experienced a dramatic turnaround from a deficit of $3,590 million in 2015 to a positive equity of $5,357 million in 2016. However, after this recovery, equity declined steadily over the subsequent years, dropping to $3,731 million in 2017, $2,225 million in 2018, and further narrowing to $703 million in 2019. This downward trend suggests increasing liabilities or financial challenges impacting retained earnings or accumulated equity despite the initial recovery.

Financial Leverage

Financial leverage ratios were not reported for 2015. Starting from 2016, there was a clear upward trajectory in leverage: from 4.51 in 2016, increasing to 6.42 in 2017, then sharply rising to 10.65 in 2018, and peaking at 35.63 in 2019. This escalating leverage ratio indicates a growing reliance on debt financing relative to equity over the years, aligning with the declining shareholders’ equity and suggesting increased financial risk or strategic borrowing.

Earnings before interest and tax (EBIT)

The EBIT demonstrates a fluctuating trend over the five-year period. Initially, it remained relatively stable between 2015 and 2016, with a minor decline from 1422 million to 1418 million US dollars. In 2017, there was a marked increase to 3124 million US dollars, more than doubling the previous year's figure. However, this peak was not sustained, as EBIT declined to 2685 million in 2018 and further decreased to 1993 million by 2019. Overall, EBIT shows a peak in 2017 followed by a downward trend.

Interest expense

Interest expense increased consistently each year from 2015 to 2019. Starting at 167 million US dollars in 2015, it rose steadily to 234 million in 2016, 288 million in 2017, 340 million in 2018, and reached 394 million by the end of 2019. This steady increase suggests growing debt or higher borrowing costs over the period.

Interest coverage ratio

The interest coverage ratio declined overall during the period, reflecting the combined effect of fluctuations in EBIT and the rising interest expense. It began at a strong 8.51 in 2015 but decreased to 6.06 in 2016. Despite the EBIT peak in 2017, the ratio rose to 10.85, indicating improved ability to cover interest expenses that year. However, this was followed by a notable decline to 7.9 in 2018 and further dropped to 5.06 in 2019, representing a weakening ability to service interest obligations towards the end of the period.

Earnings before fixed charges and tax

The earnings before fixed charges and tax showed an overall increasing trend from 2015 to 2017, rising from 1,560 million USD in 2015 to a peak of 3,318 million USD in 2017. However, this was followed by a decline in the subsequent years, dropping to 2,877 million USD in 2018 and further down to 2,178 million USD in 2019. This indicates a period of growth followed by a noticeable reduction in earnings before fixed charges and tax toward the end of the observed timeframe.

Fixed charges

Fixed charges exhibited a consistent upward trend throughout the entire period from 2015 to 2019. Starting at 305 million USD in 2015, fixed charges increased steadily each year, reaching 579 million USD by the end of 2019. This represents nearly a doubling of fixed charges over the five-year span, suggesting increasing financial obligations or costs associated with fixed expenses.

Fixed charge coverage ratio

The fixed charge coverage ratio, which measures the ability to cover fixed charges with earnings before fixed charges and tax, displayed volatility across the years. It started at 5.11 in 2015, then declined to 4.08 in 2016. It improved significantly to 6.88 in 2017, indicating the strongest coverage during the period. However, the ratio decreased again to 5.41 in 2018 and further dropped to 3.76 in 2019. This declining trend in the later years suggests a weakening capacity to cover fixed charges relative to earnings.

Summary

The data reveals that while earnings before fixed charges and tax initially grew substantially, they declined markedly after 2017. Concurrently, fixed charges rose consistently, which compounded the strain on the fixed charge coverage ratio in the latter years. The declining coverage ratio toward 2019 signals an increasing risk related to fixed financial obligations relative to earnings, emphasizing a need for close monitoring of financial leverage and cost management going forward.