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1. Common size analysis Summary income statements and balance sheets are presented for three companies in the hotel and resort industry for fiscal year 2001

1. Common size analysis

Summary income statements and balance sheets are presented for three companies in the hotel and resort industry for fiscal year 2001 (in millions).

Income Statement
Hilton Marriott Mandalay*
Revenues 2,632 10,152 2,462
COGS 1,946 9,234 1,370
Gross Profit 686 918 1,092
SG&A Expenses 71 187 473
Net Income 166 236 53
*Fiscal year ends (FYE) Jan. 02
Balance Sheet
Hilton Marriot Mandalay
Cash & Market Securities 35 817 106
Receivables, net 631 611 77
Inventories 148 96 31
Total Current Assets 996 2,130 267
Fixed Assets, net 3,986 2,930 3,050
Total Assets 8,785 9,107 4,037
Total Current Liabilities 902 1,802 309
Total Liabilities 7,002 5,629 3,097
Total Equity 1,783 3,478 941
The following additional information is provided for fiscal year 2000 (in millions):
Hilton Marriott Mandalay*
Inventory $137 $97 $31
Receivables, net 435 728 78
Working Capital 194 -502 -10
Fixed Assets, net 3,911 3,011 3,237
Total Assets 9,140 8,237 4,248
Total Equity 1,642 3,267

1,069

*FYE Jan. 02

Question 1.

Common-size analysis- Given the information presented on Sheet 1; (above info)

a) Complete these tables using common-size analysis; b) Summarize the highlights from common-size analysis for these companies and indicate possible red flags following the tables.

a. Income Statement - Common Size
Hilton Marriott Mandalay*
Revenues 100% 100% 100%
COGS
Gross Profit
SG&A Expenses
Net Income
b. Balance Sheet - Common Size
Hilton Marriot Mandalay
Cash & Market Securities
Receivables, net
Inventories
Total Current Assets
Fixed Assets, net
Total Assets 100% 100% 100%
Total Current Liabilities
Total Liabilities
Total Equity

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