Financial Analysis-Marriot



Financial Analysis-Marriot

Revenue Analysis

As per the financial statement of the company, the revenues which are reported for the year 2011 are $ 12,317 million (Marriot.com). If we compare this revenue to that of previous year, an increase of 5.4% in the revenues is reported. However, the Marriot yet has to do more since the overall performance of the biggest hotel chain is not satisfactory. The company is involved in the four segments viz. luxury, international, full service and limited service. Most of the revenue is generated by the full-service segment, this segment is based in the North America and the contribution in the overall revenue generation is around 44%. The overall sales reported $ 12,317 (Marriot.com). Each of the mentioned segments has resulted in the increase in the revenue, such as the limited service business segment gave an increase of 9.7% in the fiscal year 2011.

Profitability Analysis

The table below shows the calculations regarding the profitability of the company. The data is extracted from the company's financial statements available on its official website. First, if we talk about the gross profit margin ratio, it is 4.3%. Since the percentage is in positive digits, yet it is not a significant profit. From this it can be assumed that either the cost of sales, or the operating cost is too high or the sales increment is still not sufficient to generate the enough gross profit for the company. Further, the Net profit margin ratio is decreased due to the deduction of the tax expense; the final net profit margin ratio figure is 1.6% which is not sufficient to cover the overall profitability of the company. Moreover, the negative value (-25%) of the return on equity is really reflects bad impression not only for the current investors but also to the potential investors of ...