Corporate Financial Accounting
15th Edition
ISBN: 9781337398169
Author: Carl Warren, Jeff Jones
Publisher: Cengage Learning
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Textbook Question
Chapter 11, Problem 11.4MAD
Analyze and compare Hilton and Marriott
Hilton Worldwide Holdings, Inc. (HLT) and Marriott International, Inc. (MAR) are two of the largest hotel operators in the world. Selected financial information from recent income statements for both companies follows (in millions):
| Hilton | Marriott | |
| Operating income | $1,861 | $1,368 |
| Interest expense | (587) | (234) |
| Other income (expense) items | (19) | 50 |
| Income before income tax expense | $1,255 | $1,184 |
| Income tax expense | (891) | (404) |
| Net income | $ 364 | $ 780 |
a. Compute the times interest earned ratio for each company. Round to one decimal place.
b. 
Which company appears to better protect creditor interest? Why?
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Marriott International, Inc., and Hyatt Hotels 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 (in millions):
1
Marriott
Hyatt
2
Operating profit before other expenses and interest
$677.00
$39.00
3
Other income (expenses)
54.00
118.00
4
Interest expense
(180.00)
(54.00)
5
Income before income taxes
$551.00
$103.00
6
Income tax expense
93.00
37.00
7
Net income
$458.00
$66.00
Balance sheet information is as follows:
1
Marriott
Hyatt
2
Total liabilities
$7,398.00
$2,125.00
3
Total stockholders’ equity
1,585.00
5,118.00
4
Total liabilities and stockholders’ equity
$8,983.00
$7,243.00
The average liabilities, average stockholders’ equity, and average total assets are as follows:…
Marriott International, Inc., and Hyatt Hotels 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 (in millions):Please see the attachment for details:1. Determine the following ratios for both companies, rounding ratios and percentages to one decimal place:a. Return on total assetsb. Return on stockholders’ equityc. Times interest earnedd. Ratio of total liabilities to stockholders’ equity2. Based on the information in (1), analyze and compare the two companies’ solvency and profitability.
Examine the following selected financial information for
Best Value
Corporation and
Modern
Stores, Inc., as of the end of their fiscal years ending in
2018:
Data table
(In millions)
Best Value Corporation
Modern Stores, Inc.
1.
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . .
$15,256
$203,110
2.
Total common stockholders' equity. . . . .
$3,075
$71,460
3.
Operating income. . . . . . . . . . . . . . . . . . . .
$1,350
$26,820
4.
Interest expense. . . . . . . . . . . . . . . . . . . . . .
$88
$2,020
5.
Leverage ratio. . . . . . . . . . . . . . . . . . . . . . . .
6.
Total debt. . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
Debt ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
Times interest earned. . . . . . . . . . . . . . . . .
Requirements…
Chapter 11 Solutions
Corporate Financial Accounting
Ch. 11 - Describe the two distinct obligations incurred by...Ch. 11 - Explain the meaning of each of the following terms...Ch. 11 - If you asked your broker to purchase for you a 11%...Ch. 11 - A corporation issues 26,000,000 of 9% bonds to...Ch. 11 - If bonds issued by a corporation are sold at a...Ch. 11 - Prob. 6DQCh. 11 - Bonds Payable has a balance of 5,000,000 and...Ch. 11 - Prob. 8DQCh. 11 - Prob. 9DQCh. 11 - Issuing bonds at face amount On January 1, the...
Ch. 11 - Issuing bonds at a discount On the first day of...Ch. 11 - Prob. 11.3BECh. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Times interest earned Averill Products Inc....Ch. 11 - Prob. 11.1EXCh. 11 - Entries for issuing bonds Thomson Co. produces and...Ch. 11 - Prob. 11.3EXCh. 11 - Prob. 11.4EXCh. 11 - Prob. 11.5EXCh. 11 - Entries for issuing and calling bonds; gain Mia...Ch. 11 - Prob. 11.7EXCh. 11 - Present value of amounts due Assume that you are...Ch. 11 - Prob. 11.9EXCh. 11 - Present value of an annuity On January 1 you win...Ch. 11 - Prob. 11.11EXCh. 11 - Prob. 11.12EXCh. 11 - Present value of bonds payable; premium Moss Co....Ch. 11 - Amortize discount by interest method On the first...Ch. 11 - Prob. 11.15EXCh. 11 - Prob. 11.16EXCh. 11 - Prob. 11.17EXCh. 11 - Bond discount, entries for bonds payable...Ch. 11 - Prob. 11.2APRCh. 11 - Entries for bonds payable, including bond...Ch. 11 - Bond discount, entries for bonds payable...Ch. 11 - Prob. 11.5APRCh. 11 - Bond discount, entries for bonds payable...Ch. 11 - Bond premium, entries for bonds payable...Ch. 11 - Entries for bonds payable, including bond...Ch. 11 - Bond discount, entries for bonds payable...Ch. 11 - Bond premium, entries for bonds payable...Ch. 11 - Analyze and compare Amazon.com and Wal-Mart...Ch. 11 - Prob. 11.2MADCh. 11 - Prob. 11.3MADCh. 11 - Analyze and compare Hilton and Marriott Hilton...Ch. 11 - Ethics in Action CLG Capital Inc. is a large...Ch. 11 - Prob. 11.3TIFCh. 11 - Present values Alex Kelton recently won the...
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How To Analyze an Income Statement; Author: Daniel Pronk;https://www.youtube.com/watch?v=uVHGgSXtQmE;License: Standard Youtube License