Corporate Financial Accounting 14th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 1

Marriott and Hyatt: Solvency and profitability analysis
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):

Balance sheet information is as follows:

The average liabilities, average stockholders' equity, and average total assets are as follows:

1. Determine the following ratios for both companies (round ratio and percentages to one decimal place):
A. Return on total assets
B. Return on stockholders' equity
C. Times interest earned
D. Ratio of total liabilities to stockholders' equity
2. Based on the information in (1), analyze and compare the two companies' solvency and profitability.