Directions

This final assessment requires the analysis of financial data from 2 major competitors in the hotel industry: Marriott and Hilton.

Information about the two companies is provided in the next section. Students are required to reflect on the two companies financial data and connect each companys performance and decision-making with the macroeconomic context over the period 2017-2021. In addition, students are required to think about the future by proposing strategies connected with results to manage both companies operations, investments, and financing decisions.

In order to deepen their analysis of the selected data provided, students should refer to Annex 1 attached here Download here, which includes Marriotts and Hiltons Balance Sheets, Income Statements, and Statements of Cash Flows.

The assignment is structured in 2 blocks. Please follow the directions for each block below.

BLOCK 1: Using the 5-Figure Technique

Analyze the performance of each company using the 5-figure technique, as discussed in the first worked example video in Lesson 3 of Week 3 of the course.

Key information for each company has been provided for you in Table 1 below according to the 5-figure technique.

TABLE 1

Total assets, total equity, revenues, net income or loss, and cash flows from operating activities. Marriott and Hilton, fiscal years 2020 and 2021.

(in mill USD)

Using the information in the tables provided, complete the following analysis for both Marriott and Hilton for the 2 years provided:

a. Compare the companys total assets with its revenues to discuss the size as well as the efficiency of the company.

b. Determine the companys net profit margin (net income / revenues) and express your opinion.

c. Assess the companys leverage level by analyzing the debt-to-equity ratio.

d. Compute the quality of income ratio and assess the companys ability to turn income into cash.

e. Most importantly, taking all of your above analysis into account, express your overall opinion about the companys performance.

Your response for BLOCK 1 should be in the following format:

Marriott

Analysis according to bullet points above (1 page maximum)

Hilton

Analysis according to bullet points above (1 page maximum)

BLOCK 2: Analyzing Cash Flow Profiles

Make inferences about managements decision-making throughout the period from 2017 to 2021 based on an analysis of cash flow profiles and provide recommendations for future decision-making.

Key information on cash flows and net income for each company has been provided for you in Graph 2 below.

GRAPH 2 Net income, Cash Flows from Operating Activities, Cash Flows from Investing activities, and Cash Flows from Financing activities. Period 2017-2021. Marriott and Hilton.

Using the information in the graph provided, complete the following analysis by comparing the data presented on Marriott and Hilton:

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?

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?

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?

Your response for BLOCK 2 should be in the following format:

Analysis comparing and contrasting Marriott and Hilton according to bullet points above (1 page maximum)