Marriott International, Inc. (MAR), and Hyatt Hotels Corporation (H) 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 (in millions):Marriott HyattOperating profit before other revenue and interest$1,368 $299Other revenue (expense)5066Interest expense(234) (76)Income before income tax expense$1,184$289Income tax expense(404) (85)Net income$ 780 $204Balance sheet information is as follows:MarriottНyattTotal liabilities$18,783$ 3,841Total stockholders' equity5,3573,908Total liabilities and stockholders' equity$24,140$ 7,749| The average liabilities, average stockholders' equity, and average total assets are as follows:MarriottHyattAverage total liabilities$14,228$3,719Average total stockholders' equity8833,951Average total assets15,1117,6701. Calculate the following ratios for each year (Round ratios and percentages to one decimal place.)MarriottHyatta. Return on total assets5.2 X %2.7 X %b. Return on stockholders' equity88.3%5.2%c. Times interest earned6.1 V4.8 Vd. Ratio of total liabilities to stockholders' equity3.51.02. Which of the following statements are correct?1. Marriott has a higher return on total assets and a higher return on stockholders' equity compared to Hyatt.2. Hyatt's weaker performance relative to Marriott's appears to be due to its weak earnings relative to its debt level. Hyatt has less leverage than Marriott.3. The times interest earned ratio shows that Hyatt covers its interest charges better than Marriott; however, both companies do not have sufficient coverage.4. Hyatt's weak earnings and low debt levels are affecting the company's ability to earn returns for stockholders.1, 2 and 4

Return on total assets is the ratio which measures the company's income before interest and tax…

Answered: 1. Calculate the following ratios for…

1. Calculate the following ratios for each year (Round ratios and percentages to one decimal place.) Marriott Hyatt a. Return on total assets 5.2 x % 2.7 X %

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 4MAD: Marriott International, Inc. (MAR), and Hyatt Hotels Corporation (H) are two major owners and...

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