Analyze and compare Hilton and Marriott Obj. 4Hilton 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 MarriottOperating 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 $ 780a. Compute the times interest earned ratio for each company. Round to one decimal place.b. Which company appears to better protect creditor interest? Why?
Analyze and compare Hilton and Marriott Obj. 4Hilton 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 MarriottOperating 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 $ 780a. Compute the times interest earned ratio for each company. Round to one decimal place.b. Which company appears to better protect creditor interest? Why?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Analyze and compare Hilton and Marriott Obj. 4
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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