compare the Ratio with Other Ratios 5. Interpret the Ratios Part

As chief lendi Show more Making Business Decisions: Loaning Money to Starwood Hotels & Resorts Worldwide Inc. As chief lending officer for a bank you need to decide whether to make a loan to Starwood Hotels & Resorts Worldwide Inc. The current items listed in alphabetical order are taken from the consolidated balance sheets of Starwood Hotels & Resorts Worldwide Inc. and its competitor Hyatt Hotels Corporation and Subsidiaries at the end of 2011 and 2010 (included in the companies Form 10-Ks for the years ended December 31 2011; all amounts are in millions of dollars): Starwood Hotels & Resorts Worldwide Inc. 12/31/11 12/31/10 Accounts payable $144 $138 Accounts receivable net of allowance for doubtful accounts of $46 and $45 respectively 569 513 Accrued expenses 1177 1104 Accrued salaries wages and benefits 375 410 Accrued taxes and other 163 377 Cash and cash equivalents 454 753 Current maturities of long-term securitized vacation ownership debt 130 127 Deferred income taxes* 278 315 Inventories 812 802 Prepaid expenses and other 125 126 Restricted cash 232 53 Securitized vacation ownership notes receivable net of allowance for doubtful accounts of $10 and $10 respectively 64 59 Short-term borrowings and current maturities of long-term debt 3 9 *this item is reports as an asset Hyatt Hotels Corporation and Subsidiaries 12/31/11 12/31/10 Accounts payable $144 $145 Accrued compensation and benefits 114 108 Accrued expenses and other current liabilities 306 286 Assets held for sale 0 18 Cash and cash equivalents 534 1110 Current maturities of long-term debt 4 57 Deferred tax assets 23 29 Inventories 87 100 Prepaids and other assets 78 73 Prepaid income taxes 29 6 Receivables net of allowances of $10 and $15 respectively 225 199 Restricted cash 27 106 Short-term investments 588 524 Required Part A. The Ratio Analysis Model A banker must be able to assess a companys liquidity before loaning it money. Liquidity is the ability of a company to pay its debts as they come due. Replicate the five steps in the Ratio Analysis Model on page 74 to analyze the current ratios for Starwood Hotels & Resorts Worldwide Inc. and Hyatt Hotels Corporation and Subsidiaries: 1. Formulate the Question 2. Gather the Information from the Financial Statements 3. Calculate the Ratio 4. Compare the Ratio with Other Ratios 5. Interpret the Ratios Part B. The Business Decision Model A banker must consider a variety of factors including financial ratios before making a loan. Replicate the five steps in the Business Decision Model on page 75 to decide whether to make a loan to Starwood Hotels & Resorts Worldwide Inc. 1. Formulate the Question 2. Gather Information from the Financial Statements and Other Sources 3. Analyze the Information Gathered 4. Make the Decision 5. Monitor Your Decision Show less


 

. .

get-your-custom-paper

The post compare the Ratio with Other Ratios 5. Interpret the Ratios Part appeared first on Blackboard Masters.

"Get 15% discount on your first 3 orders with us"
Use the following coupon
FIRST15

Order Now