Hilton Worldwide Holdings, Inc. and Marriott International, Inc. are two of the largest hotel operators in the

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Hilton Worldwide Holdings, Inc. and Marriott International, Inc. 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                   $1,673                                $1,159
       Interest expense                           618                                    115

       Other expense items                      92                                     44
       Income before income taxes    $1,147                              $1,088
       Income tax expense                      465                                    335
       Net income                                $ 682                                 $ 753

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?

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Financial And Managerial Accounting

ISBN: 9781337119207

14th Edition

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

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