Block 1: Marriott a) Compare the companys total assets with its revenues to discuss the size as well as the efficiency of the company. Between 2020 and 2021, Marriott's total asset value increased by 3.5%, while revenue increased by 31.7%. This increase in assets and revenues suggests that Marriott used its assets well to drive revenue growth. From 2020 to 2021, Marriott's revenue growth far surpassed its asset base increase. 2020 revenue divided by assets equals 10.521 / 24.701 = 0.425 In 2021, Asset Revenues / Assets = 13,857 / 25,553 = 0.54 This ratio has risen slightly as a result of the period's increased revenue. This demonstrates increased efficiency and the possibility for revenue growth because the organization generates more money per unit of assets. b) Determine the companys net profit margin (net income / revenues) and express your opinion. Net profit margin in 2020 means net income divided by sales, or -0.267 / 10.521, or -2.5%. In 2021, net income split by revenue = 1.099 divided by 13.857, or 7.9%. The transition from a net loss in 2020 to a net profit in 2021 demonstrates that the net profit margin rose significantly from 2020 to 2021, as evidenced by the net loss in 2020 and the net income in 2021. This significant increase in profitability demonstrates Marriott's solid financial situation and subsequent performance. c) Assess the companys leverage level by analyzing the debt-to-equity ratio. Assets - Equity = (24,701 - 430) / Equity = D/E 2020 / 430 = 56.4% Assets - Equity = (25,553 - 1,414) / Equity = D/E 2021 /1,414 = 17% Despite being heavily loaded, the corporation's financial status improves significantly from 2020 to 2021. d) Compute the quality of income ratio and assess the companys ability to turn income into cash. CFOA / Income = 1.639 / -0.267 = -6.13 for the 2020 QoI. CFOA / Income = 1.177 / 1.099 = 1.07 for QoI 2021. Because the ratio will be less than one in 2020, the income quality will be inadequate. The quality of the income grew in 2021 because the ratio was larger than one and each dollar of income was backed by one or more dollars of cash flow. e) Most importantly, taking all of your above analysis into account, express your overall opinion about the companys performance. Overall, Marriott's financial status has significantly improved since 2020. In addition to having larger net profit margins, the company expanded and became more efficient. Furthermore, Marriott had a high level of leverage, despite the fact that the quality of its income had greatly increased. The year 2021 was a good one for business. Block 1: Hilton a) Compare the companys total assets with its revenues to discuss the size as well as the efficiency of the company. Between 2020 and 2021, Hilton's total assets fell by 7.8%, despite a 34.3% growth in revenue. The corporation enhanced revenue growth while making the best use of its current assets. It suggests increased operational effectiveness, viable cost-cutting measures, and effective revenue-optimization strategies. For 2020 Asset Turnover, revenue / assets = 4,307 / 16,755 = 0.256. Revenues / Assets in 2021 = 5.778 / 15.441 = 0.374 Asset turnover due to higher revenues in the time, a slight increase in this ratio. The fact that the company is producing more money per asset indicates greater efficacy and the possibility for significant revenue growth. b) Determine the companys net profit margin (net income / revenues) and express your opinion. 2020 net profit margin equals net income divided by revenues, or -0.715/4.307, or -16.6% Net profit margin in 2021 equals net income divided by revenues, or 0.41/5.788, or 7.08%. The transition from a net loss in 2020 to a net profit in 2021 demonstrates that the net profit margin rose significantly from 2020 to 2021, as evidenced by the net loss in 2020 and the net income in 2021. This huge increase in profits demonstrates Hilton's strong financial position. c) Assess the companys leverage level by analyzing the debt-to-equity ratio. Assets - Equity = (16755 + 1486) / Equity = D/E 2020 / -1486 = -12.3% Assets - Equity = (15441 + 819) / Equity = D/E 2021 /-819 = -19.8% d) Compute the quality of income ratio and assess the companys ability to turn income into cash. 2020 QoI = CFOA/Income = 0.708/-0.715 = -0.99 CFOA / Income = 0.109 / 0.410 = 0.26 for the QoI 2021. Because the ratio is less than one, the standard of earnings in 2020 is believed to be of low quality. Although the income quality in 2021 was improved than in 2020 due to a lower ratio, it is still considered inadequate. e) Most importantly, taking all of your above analysis into account, express your overall opinion about the companys performance. Although Hilton's overall performance improved between 2020 and 2021, it continues to display below-average growth and performance. The negative equity affects the company's leverage. Although the net profit margin grew dramatically, it is important to recall that the company posted a net loss in 2020. Between 2020 and 2021, the level of living rose. Block 2: Marriott & Hilton Comparison/Contrast a) Connect the macroeconomic context of the period with the information presented in the graphs. How could macroeconomic factors have affected each companys performance based on the information presented? The following are some of Hilton's trends: - In 2020, the cash flows from finance activities go up by a lot. This is linked to the high net loss and the drop in cash flows from operating activities. - The drop in financing activity cash flow is the opposite of the rise in net income for 2021. - A steady flow of money from activities related to investments. Marriott Trends says: - The net loss in 2020 will be a lot bigger than it was in 2019. The trend is toward more money coming in from financial action and very little money coming in from investing operations. - A trend toward less money coming in from running activities In 2020, both the Marriott and Hilton rooms were hurt by the Covid-19 Virus in a big way. This is shown by the fact that both businesses have a cash loss. Also, Hilton's large net loss was related to the fact that cash flows from funding activities went up. This is interesting because Hilton took advantage of the chance to finance (the statement of cash flows shows that the company borrowed $4,000 and paid back $2,000 in loans, making a positive $2,000). In 2020, the whole world was put in a lockdown. Marriott, on the other hand, even though it reported a loss, saw a slight rise in investments for 2020. After Covid was put into use in both hotels in 2021, their net profits went up. It's interesting to see that the running capital flows for both hotels went down in 2021 compared to 2020. This could be because people were afraid to travel after countries got rid of their quarantines, which hurt hotel business. b) What are the key differences in the strategy that each company pursued? Which company do you think pursued the more effective strategy and why? Unlike Hilton, Marriot has a history of paying back debt from 2017 to 2021. Hilton hasn't. Marriot is paying off its loan with the money it makes from its business. Hilton had a hard time in 2020, and it had to get money in order to keep doing business. When you look at the current rates of the two companies, you can see that Hilton's ratio is more than twice as high as Marriott's, but it has stayed the same over time. This shows that while Hilton's debts went down, its assets went up by a lot. I think that Marriott's plan for financial growth and success is better than Hilton's. c) Taking into account each companys current financial situation, what strategies would you propose to manage each companys operations, investments, and financing decisions for the period from 2022-2025? I would tell Hilton that if it wants to stay in business, it needs to make effective cash flow. So that they can stay competitive, they also need to put money back into long-term assets. Hilton should pay back its debt and give money to its owners to keep its health and finances stable. In terms of paying off debt through running activities, Marriott's current operations and financing plan are good. I would suggest that Marriott put its money back into long-term investments