Question
Hide Full Description Marriott International, Inc., and Wyndham Worldwide Corporation are two major owners and managers of lodging and resort properties in the United States.
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Marriott International, Inc., and Wyndham Worldwide Corporation are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement information for the two companies is as follows for a recent year:
x | Marriott | Wyndham |
x | (in millions) | (in millions) |
Operating profit before other expenses and interest | $695 | $718 |
Other income (expenses) | 36 | 12 |
Interest expense | (180) | (167) |
Income before income taxes | $551 | $563 |
Income tax expense | 93 | 184 |
Net income | $458 | $379 |
Balance sheet information is as follows:
x | Marriott | Wyndham |
x | (in millions) | (in millions) |
Total liabilities | $7,398 | $6,499 |
Total stockholders equity | 1,585 | 2,917 |
Total liabilities and stockholders equity | $8,983 | $9,416 |
The average liabilities, stockholders equity, and total assets were as follows:
x | Marriott | Wyndham |
x | (in millions) | (in millions) |
Average total liabilities | $7,095 | $6,582 |
Average total stockholders equity | 1,363 | 2,802 |
Average total assets | 8,458 | 9,384 |
1. Determine the following ratios for both companies (round to one decimal place after the whole percent):a. Rate earned on total assetsb. Rate earned on total stockholders equityc. Number of times interest charges are earnedd. Ratio of liabilities to stockholders equity2. Analyze and compare the two companies, using the information in (1)
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