Analyze and compare Marriott and Hyatt Marriott International, Inc. (MAR) and Hyatt Hotels Corporation (H) are two major owners and managers of lodging a resort properties in the United States. Abstracted income statement information for the two companies is as follows for a reces year (in millions): Marriott Hyatt Operating profit before other $1,750 $(251) revenue and interest Other revenue (expense) (150) 458 Interest expense (420) (163) Income before income tax $1,180 $44 expense Income tax expense (81) (266) Net income (loss) $1,099 $(222) Balance sheet information is as follows: Total liabilities Marriott Hyatt $24,139 $9,037 Total stockholders' equity 1,414 3,566 Total liabilities and stockholders' $25,553 $12,603 equity The average liabilities, average stockholders' equity, and average total assets are as follows: Average total liabilities Average total stockholders' equity Average total assets Marriott Hyatt $24,205 $7,476 922 3,390 25,127 10,866 1. Determine the following ratios for both companies (Round ratios and percentages to one decimal place.) For those boxes in which you must enter subtracted or negative numbers use a minus sign. Marriott a. Return on total assets 5.2 x % Hyatt 2.7 x% b. Return on stockholders' equity 88.3 x % 5.2 x% c. Times interest earned 6.1 48
Analyze and compare Marriott and Hyatt Marriott International, Inc. (MAR) and Hyatt Hotels Corporation (H) are two major owners and managers of lodging a resort properties in the United States. Abstracted income statement information for the two companies is as follows for a reces year (in millions): Marriott Hyatt Operating profit before other $1,750 $(251) revenue and interest Other revenue (expense) (150) 458 Interest expense (420) (163) Income before income tax $1,180 $44 expense Income tax expense (81) (266) Net income (loss) $1,099 $(222) Balance sheet information is as follows: Total liabilities Marriott Hyatt $24,139 $9,037 Total stockholders' equity 1,414 3,566 Total liabilities and stockholders' $25,553 $12,603 equity The average liabilities, average stockholders' equity, and average total assets are as follows: Average total liabilities Average total stockholders' equity Average total assets Marriott Hyatt $24,205 $7,476 922 3,390 25,127 10,866 1. Determine the following ratios for both companies (Round ratios and percentages to one decimal place.) For those boxes in which you must enter subtracted or negative numbers use a minus sign. Marriott a. Return on total assets 5.2 x % Hyatt 2.7 x% b. Return on stockholders' equity 88.3 x % 5.2 x% c. Times interest earned 6.1 48
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Analyze and compare Marriott and Hyatt
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 Hyatt
Operating profit before other
$1,750 $(251)
revenue and interest
Other revenue (expense)
(150) 458
Interest expense
(420) (163)
Income before income tax
$1,180 $44
expense
Income tax expense
(81) (266)
Net income (loss)
$1,099 $(222)
Balance sheet information is as follows:
Marriott Hyatt
Total liabilities
$24,139
$9,037
Total stockholders' equity
1,414 3,566
Total liabilities and stockholders'
$25,553 $12,603
equity
The average liabilities, average stockholders' equity, and average total assets are as follows:
Average total liabilities
Average total stockholders' equity
Average total assets
Marriott Hyatt
$24,205 $7,476
922 3,390
25,127 10,866
1. Determine the following ratios for both companies (Round ratios and percentages to one decimal place.) For those
boxes in which you must enter subtracted or negative numbers use a minus sign.
a. Return on total assets
b. Return on stockholders' equity
c. Times interest earned
d. Ratio of liabilities to stockholders' equity
Marriott
5.2 x %
88.3 x %
Hyatt
2.7 x %
5.2 x %
6.1 x
4.8 x
3.5 x
1.0 x
2. Which of the following statements are correct?
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