Question: Two leading hotel chains in the United States are Starwood Hotels and Resorts (owners of Sheraton, Westin, etc.) and Marriott. Selected financial data for these two close competitors are as follows:
Required: 1. Calculate the debt to equity ratio for Starwood and Marriott for the most recent year. Which company has the higher ratio? Compare your calculations with those for Coca-Cola and PepsiCo reported in the chapter. Which industry maintains a higher debt to equity ratio?
2. Calculate the return on assets and the return on equity for Starwood and Marriott. Which company has the better profitability ratios? How do they compare with those for Coca-Cola and PepsiCo reported in the chapter?
3. Calculate the times interest earned ratio for Starwood and Marriott. Which company is better able to meet interest payments as they become due? Compare your calculations with those for Coca-Cola and PepsiCo reported in the chapter. Which industry has a better times interest earned ratio?