financial analysis
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marriottvshilton.docxBalance sheet analysis
1.From the balance sheet analysis we can know that：
（1）The largest asset of Marriott international is intangible asset, which represents 17.419 billion dollars, and the largest debt is long-term debt, which represents 8.514 billion dollars.
（2）The largest asset of Hilton hotel is also intangible asset, which represents 11.316 billion dollars, and their largest debt is also long-time debt, which represents 7.266 billion dollars.
2.（1）The total asset of Marriott international is 23.696 billion dollars, among which 2.225 billion dollars belongs to the owners, accounting 9.39 percent and 21.471 billion dollars belongs to creditors, accounting for 91.61 percent.
Profit statement analysis:
1.In accordance with the statement of income, we can draw conclusions from the analysis:
（2）The majority of expenditure of Hilton hotel goes to the cost of operation too, which amounts to 6.98 billion dollars.
2. Compared to the data regarding circumstances of 2017, there are normal and discontinued items for both Marriott international and Hilton hotel.
3.Through the comparison of net profits of these two companies in the year of 2017 and 2018, we can know that:
（1）The net profit of Marriott international in the year of 2018 has seen slight growth of 535 million dollars from 1.372 billion dollars in 2017 to 1.907 billion dollars in 2018.
（2）While the net profit of Hilton hotel has dropped from 1.259 billion dollars to 764 million dollars, a quite substantial decrease of profit.
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Statement of cash flows 31st December,2018 Unit: m-million, b-billion dollars |
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Marriott international |
Hilton hotel |
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Net profit |
1.907b |
0.769b |
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Depreciation loss and amortization |
284m |
325, |
|
Deferred tax and investment tax cut |
-239m |
-14m |
|
Other operating funds |
481m |
82m |
|
Operation funds |
2.433b |
1.162b |
|
Special items |
-- |
-- |
|
Changes of operating items |
-76m |
93m |
|
Cash flow of operating |
2.537b |
1.255b |
|
Asset flow-out |
-556m |
-159m |
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Net assets from acquisition |
-- |
-- |
|
Revenue of fixed assets and sales business |
479m |
-- |
|
Net investment sales |
35m |
-- |
|
Non-cash item |
-10m |
28m |
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Cash flow of investment |
-52m |
-131m |
|
Cash dividend |
-543m |
-181m |
|
Changes in capital stock |
--2.846b |
-1.721b |
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Issuance/cut net liability |
1120m |
650m |
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Other financing funds |
-105m |
-48m |
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Financing cash flow |
-2.374b |
-1.3b |
|
Exchange rate impact |
-- |
-10 m |
|
Funds for other items |
-- |
-- |
|
Net cash flow |
-69m |
-186m |
|
Free cash flow |
1.801b |
1.183b |
Statement of cash flows:
1. From the statement of cash flows, we can know that: items that are relevant to cash flows of operation include depreciation loss and amortization, deferred tax and investment tax credit, other funds for operating, cost of operation and changes in working capital. Besides, all transaction activities are fair.
2.Cash flows of operating for both two companies are higher than their net profits, which demonstrates that cash flows of their operating are sufficient and they are both potential in earning much more profits.
3.There are flow-in and flow-out in cash flows of investment for both Marriott international and Hilton hotel:
（1）For Marriott international, there was 556 million dollars of cash flows of investment that was used for capital expenditure, and ten million dollars was used for no cash items. Fixed assets and sales of business have produced cash flows of 479 million dollars. The cash flow brought by investment business was35 million dollars. The total amount of cash flows of investment has seen a deficit of 52 million dollars.
（2）There was 159 million dollars in the cash flow of investment has been used for capital expenditure. Cash flow produced by non-cash items was 28 million dollars. The total amount of cash flow of investment has seen a deficit of 131 million dollars.
4. Both Marriott international and Hilton hotel have seen a flow-in and flow-out of financing cash flow.
（1）543 million dollars of financing cash flow of Marriott international has been issued as cash dividend. 2.846 million dollars of financing cash flow of the company has been put into changes in equity values.105 million dollars of financing cash flow has been used as other financing funds.1.12 billion dollars has been brought about by the issuance of debts. The total amount of financing cash flow has seen a deficit of 2.374 billion dollars in the year of 2018.
（2）181 million dollars of financing cash flow of Hilton hotel has been issued as cash dividend. 1.721 billion dollars of financing cash flow of the company has been put into changes in equity. 48 million dollars of financing cash flow has been used as other financing funds. 650 million dollars of cash flow has been produced by the issuance of debts. The total amount of financing cash flow has seen a deficit of 1.3 billion dollars.
Stock market capitalization:
Stock values reflected from the internet show that：
1. The value of each stock of Marriott international at the present reaches 143.24 dollars.
2. The value of each stock of Hilton hotel in the current reaches 109.57 dollars.
Return on owners equity
· The return on equity for Marriott in 2018 is 85.7%.. In contrast Hilton has a ROE of 1.387. therefore Hilton has a
