Bundle: Financial & Managerial Accounting, 14th + Working Papers for Warren/Reeve/Duchac's Corporate Financial Accounting, 14th + Working Papers, ... & Managerial Accounting, 14th + CengageNOWv2,
14th Edition
ISBN: 9781337804011
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 11, Problem 4ADM
Hilton and Marriott: Times interest earned
Hilton Worldwide Holdings, Inc. and Marriott International, Inc. 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 | $1,673 | $1,159 |
| Interest expense | 618 | 115 |
| Other expense items | 92 | 44 |
| Income before income taxes | $1,147 | $1,088 |
| Income tax expense | 465 | 335 |
| Net income | $ 682 | $ 753 |
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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Times interest earned
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Chapter 11 Solutions
Bundle: Financial & Managerial Accounting, 14th + Working Papers for Warren/Reeve/Duchac's Corporate Financial Accounting, 14th + Working Papers, ... & Managerial Accounting, 14th + CengageNOWv2,
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