Answer the additional Question in attached excel under Income statement and balance sheet based on Instructor’s feedback. (For Excel: Income statement and balance sheet only)
Income Statement: numbers are correct.
Q1: good choice on the accounts that changed the most. It would
seem that based on Has SGA been managed well? Has this category of
expense changed disproportionate to revenue along with the total
expenses? In financial statement analysis the underlying idea is to
understand the nature of the business and whether its business model is
generating the success investors and creditors are hopeful about.
The change in tax law that substantially reduced Choice’s
income tax in 2018 is also an interesting phenomena. Any chance the
savings in taxes will result in improvement to employee salaries and
benefits? Your answers to this question meets the requirements. But
is there more than can be explored to reveal something more about Choice?
Balance Sheet: Q1: good work.
What does the significant change in cash and in intangible assets
tell you about Choice? What do the changes in these accounts suggestion
about management decision-making and confidence in their business model?
Anything else strike you as telling about Choice besides these two
accounts?
Q2: Also good work. But also, anything else
strike you as telling about Marriott besides treasury stock and long-term
debt? Think about what the account titles mean about how well the
businesses are managed and how well their strategic plans are being met, in
addition to the percentages.
Q3: Using ratios to better understand the each
company’s strength is a very good approach. However, is a comparison of
Choice to Marriott a true apples to apples comparison? Though they are in
the same industry, their business models are quite different. Given
Choice’s business model in comparison to Marriott (which is the largest hotel
business in the world, as I understand it), should the negative equity be a
concern? It would also seem relevant to consider each company’s market
value per share. How investors view these two companies might provide
useful insight
Write1/2 page of discussion by answering question below ((Write 150-200 words in discussing this in a separate word document).
Earlier,
Frank mentioned you would need to attend a meeting with other finance and
accounting analysts at MCS to discuss the differences in strategy between
Choice Hotels and Marriott. Both companies have a BBB debt rating from Standard
& Poor’s. This is the lowest investment grade rating and indicates that
both companies have been aggressive with growth, finance, and Treasury Stock
purchases..
·Discuss the differences in strategy related
to business growth, finance, and Treasury Stock purchases.
·Discuss the similarities in strategy.
·Discuss any strategy recommendations for
Choice Hotels’ management.
At the end, Executive summary will be written on Income statement and Balance sheet of the attached document (Excel) and use attached template as guide.
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