Marriott International Inc (MAR)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	—	—	1,064.23	704.96
Days of sales outstanding (DSO)	days	40.64	41.74	45.17	52.21	61.05
Number of days of payables	days	116.53	149.24	178.43	204.94	124.50
Cash conversion cycle	days	-75.88	-107.49	-133.26	911.50	641.50

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 40.64 – 116.53
= -75.88

The cash conversion cycle is a measure that indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Looking at the data for Marriott International Inc, we observe the following trends:

- As of December 31, 2020, the cash conversion cycle stood at 641.50 days, reflecting a relatively long period for the company to convert its investments into cash. This could indicate inefficiencies in managing inventory, receivables, and payables.

- By December 31, 2021, the cash conversion cycle further increased to 911.50 days, signaling a deterioration in the company's ability to optimize its working capital and generate cash from operations efficiently.

- However, a significant improvement was seen by December 31, 2022, with the cash conversion cycle showing as -133.26 days. This negative value suggests that Marriott International Inc has managed to reduce its cash conversion cycle significantly, potentially streamlining its operations, improving inventory turnover, and enhancing liquidity.

- This trend of improvement continued into December 31, 2023, where the cash conversion cycle decreased further to -107.49 days, indicating the company's continued focus on efficiently managing its working capital and generating cash flow.

- By December 31, 2024, the cash conversion cycle was reported as -75.88 days, showing a continued reduction in the time taken by Marriott International Inc to convert its investments into cash. This suggests the company's efforts in enhancing operational efficiency and cash flow generation.

Overall, the fluctuation in Marriott International Inc's cash conversion cycle over the years reflects varying efficiencies in working capital management. The recent trend of achieving negative days indicates an improvement in liquidity and operational effectiveness, which can be beneficial for sustaining financial health and growth in the long term.