1. The return on assets ratio tells us the profit generated by each dollar in assets. You will want to compare this ratio to Choice Hotels' historical performance and to Marriott International to understand if it is an acceptable ratio. Is the return on assets ratio acceptable? Why or why not?

2. Which of the above ratios would you use to determine which company, Choice Hotels or Marriott International, is more attractive for an acquisition? Why?

3. Based on the financial statement analysis, earnings per share analysis, budgeting ratios, and the above profitability ratios, which company would you invest in and why?

Choice Hotels 2016 Ratios 2015 2016 2015 Basicearning power(BEP) ratio earnings before interest and taxes (EBIT)/total assets Return on equity (ROE) net profit/total equity Return on assets (ROA) net income/total assets Profit margin profit (gross or net)/sales Operating margin operating income/revenue 0.97 0.45 0.16 0.15 0.26 1.06 0.32 0.18 0.15 0.26 0.68 0.15 0.03 0.05 0.08 2.30 0.24 0.14 0.05 0.09 Percent Change from 2015 to 2016 Choice -8.59% 38.42% -8.44% 1.23% 1.40% Percent Change from 2015 to 2016 Marriott 70.32% 160.85% -77.12% 22.95% 14.02%