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Marriott International, Inc., and Hilton Hotels Corporation are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement
Marriott International, Inc., and Hilton Hotels Corporation are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement information from the two companies is as follows for a recent year: Marriott Hilton (in millions) (in millions) Operating profit before other expenses and interest $1,011 $1,274 Other income (expenses) 7 62 Interest expense (124) (498) Income before income taxes 894 838 Income tax expense 286 266 Net income $608 $572 Balance sheet information is as follows: Marriott Hilton (in millions) (in millions) Total liabilities $5,970 $12,754 Total stockholders' equity 2,618 3,727 Total liabilities and stockholders' equity $8,588 $16,481 The average liabilities, stockholders' equity, and total assets were as follows: Marriott Hilton Average total liabilities $7,250 $9.343 Average total stockholders' equity 2,935 3,269 Average total assets 6,933 12,612 1. Determine the following ratios for both companies (round to one decimal place after the whole percent): a. Rate earned on total assets b. Rate earned on total stockholders' equity c. Number of times interest charges are earned d. Ratio of liabilities to stockholders' equity 2. Analyze and compare the two companies, using the information in (1). Be sure to use at least 1 outside reference to support your analysis
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