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?