Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 38

Comprehensive profitability and solvency analysis
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:

Balance sheet information is as follows:

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

1. Determine the following ratios for both companies (round to one decimal place after the whole percent):
a. Rate earned on total assets
b. Rate earned on stockholders' equity
c. Number of times interest charges are earned
d. Ratio of liabilities to stockholders' equity
2. Analyze and compare the two companies, using the information in (1)