Reference no: EM133052396

Question - 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):

	Marriott	Hyatt
Operating profit before other expenses and interest	$677.00	$39.00
Other income (expenses)	54.00	118.00
Interest expense	(180.00)	(54.00)
Income before income taxes	$551.00	$103.00
Income tax expense	93.00	37.00
Net income	$458.00	$66.00

Balance sheet information is as follows:

	Marriott	Hyatt
Total liabilities	$7,398.00	$2,125.00
Total stockholders' equity	1,585.00	5,118.00
Total liabilities and stockholders' equity	$8,983.00	$7,243.00

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

	Marriott	Hyatt
Average total liabilities	$7,095	$2,132
Average total stockholders' equity	1,364	5,067
Average total assets	8,458	7,199

Required -

1. Determine the following ratios for both companies: A. Return on total assets, B. Return on stockholders' equity, C. Times interest earned, D. Ratio of total liabilities to stockholders' equity. Round ratios and percentages to one decimal place.

2. Based on the information in (1), analyze and compare the two companies' solvency and profitability.