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GuruFocus has detected 3 Warning Signs with Marriott International Inc $MAR.
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Marriott International Inc (NAS:MAR)
Beneish M-Score
-1.94 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Marriott International Inc has a M-score of -1.94 signals that the company is a manipulator.

MAR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.58   Max: -1.94
Current: -1.94

-3.58
-1.94

During the past 13 years, the highest Beneish M-Score of Marriott International Inc was -1.94. The lowest was -3.58. And the median was -2.75.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Marriott International Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.3039+0.528 * 0.9528+0.404 * 1.2658+0.892 * 1.1785+0.115 * 1.7731
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4883+4.679 * -0.0338-0.327 * 0.4776
=-1.94

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,695 Mil.
Revenue was 5456 + 3942 + 3902 + 3772 = $17,072 Mil.
Gross Profit was 882 + 596 + 587 + 561 = $2,626 Mil.
Total Current Assets was $3,371 Mil.
Total Assets was $24,140 Mil.
Property, Plant and Equipment(Net PPE) was $2,335 Mil.
Depreciation, Depletion and Amortization(DDA) was $168 Mil.
Selling, General & Admin. Expense(SGA) was $1,112 Mil.
Total Current Liabilities was $5,147 Mil.
Long-Term Debt was $8,197 Mil.
Net Income was 244 + 70 + 247 + 219 = $780 Mil.
Non Operating Income was 4 + 6 + 5 + 0 = $15 Mil.
Cash Flow from Operations was 450 + 334 + 465 + 333 = $1,582 Mil.
Accounts Receivable was $1,103 Mil.
Revenue was 3706 + 3578 + 3689 + 3513 = $14,486 Mil.
Gross Profit was 530 + 519 + 553 + 521 = $2,123 Mil.
Total Current Assets was $1,384 Mil.
Total Assets was $6,082 Mil.
Property, Plant and Equipment(Net PPE) was $1,029 Mil.
Depreciation, Depletion and Amortization(DDA) was $139 Mil.
Selling, General & Admin. Expense(SGA) was $634 Mil.
Total Current Liabilities was $3,233 Mil.
Long-Term Debt was $3,807 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1695 / 17072) / (1103 / 14486)
=0.09928538 / 0.07614248
=1.3039

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(2123 / 14486) / (2626 / 17072)
=0.14655529 / 0.15381912
=0.9528

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3371 + 2335) / 24140) / (1 - (1384 + 1029) / 6082)
=0.76362883 / 0.60325551
=1.2658

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=17072 / 14486
=1.1785

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(139 / (139 + 1029)) / (168 / (168 + 2335))
=0.11900685 / 0.06711946
=1.7731

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1112 / 17072) / (634 / 14486)
=0.0651359 / 0.0437664
=1.4883

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((8197 + 5147) / 24140) / ((3807 + 3233) / 6082)
=0.55277548 / 1.15751398
=0.4776

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(780 - 15 - 1582) / 24140
=-0.0338

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Marriott International Inc has a M-score of -1.94 signals that the company is likely to be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Marriott International Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.00010.7891.10181.04440.88541.22490.97180.94290.9551.3039
GMI 0.97661.19491.1130.89741.21590.75480.99620.96830.97240.9528
AQI 0.96161.00761.02981.01941.20990.90730.93911.11751.09541.2658
SGI 1.0830.99150.8471.07181.05350.95921.08211.07921.051.1785
DEPI 1.02481.10950.97290.99771.09211.76580.81730.82630.77341.7731
SGAI 1.07071.03171.06161.0080.91510.80691.03050.94090.91621.4588
LVGI 1.25380.97640.92121.01421.28051.12941.02521.10751.21960.4776
TATA -0.0198-0.0373-0.1312-0.079-0.1474-0.0705-0.0765-0.071-0.101-0.0338
M-score -2.62-2.74-3.05-2.80-3.10-2.73-2.85-2.81-3.01-1.94

Marriott International Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.04910.94291.0451.03981.04230.9550.9270.92191.39481.3039
GMI 0.98530.96830.9450.95470.97310.97240.99660.99580.98490.9528
AQI 1.00691.11750.97921.01591.07711.09541.15111.00791.34331.2658
SGI 1.01011.07921.08361.0811.06561.051.0521.05181.06861.1785
DEPI 0.74210.82630.83020.67590.64710.77340.90271.18952.4351.7731
SGAI 1.05940.94090.95640.950.89410.91620.94480.97861.01661.4883
LVGI 1.07191.10751.11971.21061.27971.21961.1731.01760.46960.4776
TATA -0.085-0.071-0.0781-0.0812-0.0873-0.101-0.1095-0.0934-0.0306-0.0338
M-score -2.89-2.81-2.82-2.87-2.89-3.01-3.01-2.92-1.73-1.94
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