What advice would you give to the client

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Reference no: EM132165069

Project : Workbook Questions

Income Statement:

1. Based on your horizontal analysis of Choice Hotels' and Marriott International's total revenue, total expenses, and net income, which company would be a more attractive target for an acquisition by the equity firm and why?

2. Given the changes in total revenue, operating income, and net income from 2016 to 2017, did Choice Hotels or Marriott International experience more change? Which area (total revenue, operating income, or net income) changed most?

Balance Sheet:

1. Based on your horizontal analysis of Choice Hotels' and Marriott International's total assets, total liabilities, and total equity, which company is most attractive for an acquisition by the equity firm and why?

2. What advice would you give to the client, Choice Hotels, to reduce its total liabilities?

Cash Flow:

1. Based on your horizontal analysis of Choice Hotels' and Marriott International's operating, investing, and financing activities, which company is most attractive for an acquisition by the equity firm and why?

2. What advice would you give to the client, Choice Hotels, to improve their investing and financing activities?

Budgeting:

1. Quick ratios between 0.5 and 1 are considered satisfactory, as long as the collection of receivables is not expected to slow. Does the client, Choice Hotels, have enough current assets to meet the payment schedule of current liabilities with a margin of safety?

2. Which of the above ratios would you use to determine which company, Choice Hotels or Marriott International, is more attractive for an acquisition by the equity firm and why?

Profitability:

1. The return on assets ratio tells us the profit generated by each dollar in assets. You will want to compare this ratio to Choice Hotels' historical performance and to Marriott International to understand if it is an acceptable ratio. Is the return on assets ratio acceptable? Why or why not?

2. Which of the above ratios would you use to determine which company, Choice Hotels or Marriott International, is more attractive for an acquisition? Why?

3. Based on the financial statement analysis, earnings per share analysis, budgeting ratios, and the above profitability ratios, which company would you invest in and why?

Reference no: EM132165069

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