As chief lending officer for a bank, you need to decide whether to make a loan to Starwood Hotels & Resorts Worldwide, Inc.The current items, listed in alphabetical order, are taken from the consolidated balance sheets of Starwood Hotels & Resorts Worldwide, Inc., and its competitor Hyatt Hotels Corporation and Subsidiaries at the end of 2011 and 2010 (included in the companies€™ Form 10-Ks for the years ended December 31, 2011; all amounts are in millions of dollars):
Required
Part A. The Ratio Analysis Model
A banker must be able to assess a company€™s liquidity before loaning it money. Liquidity is the ability of a company to pay its debts as they come due. Replicate the five steps in the Ratio Analysis Model on page 74 to analyze the current ratios for Starwood Hotels & Resorts Worldwide, Inc., and Hyatt Hotels Corporation and Subsidiaries:
1. Formulate the Question
2. Gather the Information from the Financial Statements
3. Calculate the Ratio
4. Compare the Ratio with Other Ratios
5. Interpret the Ratios
Part B. The Business Decision Model
A banker must consider a variety of factors, including financial ratios, before making a loan. Replicate the five steps in the Business Decision Model on page 75 to decide whether to make a loan to Starwood Hotels & Resorts Worldwide, Inc.
1. Formulate the Question
2. Gather Information from the Financial Statements and Other Sources
3. Analyze the Information Gathered
4. Make the Decision
5. Monitor Your Decision

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Starwood Hotels & Resorts Worldwide, Inc. 12/31/11 12/31/10 $ 138 $ 144 Accounts payable Accounts receivable, net of allowance for doubtful accounts of $46 and $45, respectively Accrued expenses 569 513 1,177 1,104 Accrued salaries, wages and benefits 375 410 Accrued taxes and other 163 377 Cash and cash equivalents 454 753 Starwood Hotels & Resorts Worldwide, Inc. 12/31/11 12/31/10 Current maturities of long-term securitized vacation ownership debt $ 130 $ 127 Deferred income taxes* 278 315 Inventories 812 802 Prepaid expenses and other 125 126 Restricted cash 232 53 Securitized vacation ownership notes receivable, net of allowance for doubtful accounts of $10 and $10, respectively Short-term borrowings and current maturities of long-term debt 64 59 "This item is reported as an asset. Hyatt Hotels Corporation and Subsidiaries 12/31/11 12/31/10 Accounts payable Accrued compensation and benefits Accrued expenses and other current liabilities $144 $ 145 108 114 306 286 Assets held for sale 18 Cash and cash equivalents Current maturities of long-term debt 534 1,110 57 4 23 Deferred tax assets 29 87 Inventories 100 Prepaids and other assets Prepaid income taxes Receivables, net of allowances of $10 and $15, respectively Restricted cash Short-term investments 78 73 29 6. 225 199 27 106 588 524