determine the following ratios for both companies, then based on the information analvze and compare the two companies' solvency and profitability. Ratios: Return on total assetsReturn on stockholders' equityTimes interest earnedRatio of total liabilities to stockholders' equity. Marriott International, Inc., and Hyatt Hotels Corporation aretwo major owners and managers of lodging and resort propertiesin the United States. Abstracted income statement informationfor the two companies is as follows for a recent year (in millions):Operating profit before other expenses and InterestOther revenueInterest expenseIncome before Income tax expenseIncome tax expenseNet IncomeBalance sheet information is as follows:Total liabilitiesTotal stockholders' equityTotal liabilities and stockholders' equityMarriott$2,366319(340)$2,345438$1,907Average total liabilitiesAverage total stockholders' equityAverage total assetsMarriott$21,4712,225$23,696Marriott$20,8682,90323,771Hyatt$332695(76)$951182$769Hyatt$3,966The average liabilities, average stockholders' equity, and average total assets are as follows:Hyatt$3,8483,7607,6083,677$7,643

Answered: determine the following ratios for both…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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determine the following ratios for both companies, then based on the information analvze and compare the two companies' solvency and profitability. Ratios: Return on total assets Return on stockholders' equity Times interest earned Ratio of total liabilities to stockholders' equity.

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):
Operating profit before other expenses and Interest
Other revenue
Interest expense
Income before Income tax expense
Income tax expense
Net Income
Balance sheet information is as follows:
Total liabilities
Total stockholders' equity
Total liabilities and stockholders' equity
Marriott
$2,366
319
(340)
$2,345
438
$1,907
Average total liabilities
Average total stockholders' equity
Average total assets
Marriott
$21,471
2,225
$23,696
Marriott
$20,868
2,903
23,771
Hyatt
$332
695
(76)
$951
182
$769
Hyatt
$3,966
The average liabilities, average stockholders' equity, and average total assets are as follows:
Hyatt
$3,848
3,760
7,608
3,677
$7,643

Expert Solution

Step 1

Ratio Analysis :— Ratio analysis is the process of Determination and Interpretation numerical relationship based on Financial Statement.

Profitability Ratio :— The ratios given an indication of the efficiency with which the operations of Business are carried on.

Solvency ratio :— Solvency ratio is a key metric used to measure an enterprise's ability to meet its long-term debt obligations

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