Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Case 9-5 Comprehensive Profitability and Solvency Analysis Starwood Hotels & Resorts Worldwide Inc. (HOT) and Marriott International Inc. (MAR) are two major owners and managers

image text in transcribed

Case 9-5 Comprehensive Profitability and Solvency Analysis Starwood Hotels & Resorts Worldwide Inc. (HOT) and Marriott International Inc. (MAR) are two major owners and managers of lodging and resort properties in the United States. Financial data (in millions) for a recent year for the two companies are as follows: Starwood Marriott Income statement data: Interest expense $ 111 $ 340 Income before income tax 669 2,345 Net income 489 1,907 Balance sheet data: Total assets $8,268 $23,696 Total liabilities 6,969 21,471 Total stockholders' equity 1,299 2,225 The average liabilities, stockholders' equity, and total assets were as follows: Starwood Marriott Average total assets $8,464 $23,771 Average total liabilities 7,050 20,867 Average total stockholders' equity 1,414 2,904 1. Determine the following ratios for both companies (round to one decimal place after the whole percent): a. Return on total assets. b. Return on stockholders' equity. c. Times interest earned. d. Debt ratio for the most recent year. e. Ratio of liabilities to stockholders' equity for the most recent year. 2. Analyze and compare the two companies, using the information in (1)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting International

Authors: Anthony A. Atkinson, Robert S. Kaplan, S. Mark Young

4th Edition

0131230263, 978-0131230262

More Books

Students explore these related Accounting questions