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Choice Hotels Marriott International (2016/2015)-1 (2016/2015)-1 10-K CHH 2016 10-K Report CHH 2015 10-K Report 10-K...

Choice Hotels Marriott International (2016/2015)-1 (2016/2015)-1
10-K CHH 2016 10-K Report CHH 2015 10-K Report 10-K MAR 2016 10-K Report MAR 2015 10-K Report Choice percent change from 2015 to 2016 Marriott percent change from 2015 to 2016
Account Name 2016 10-K 2015 10-K Account Name 2016 10-K 2015 10-K Choice Marriott
CASH FLOWS FROM OPERATING ACTIVITIES OPERATING ACTIVITIES OPERATING ACTIVITIES
Net income $                      139,371.00 $                      128,029.00 Net income $                             780,000 $                             859,000 Net income 9% -9%
Adjustments to reconcile net income to net cash provided by operating activities: $                        11,705.00 $                        11,542.00 Adjustments to reconcile to cash provided by operating activities: $                             (77,000) $                             (41,000) Adjustments to reconcile to cash provided by operating activities: 1% 88%
Net cash provided by operating activities $                      152,035.00 $                      159,872.00 Net cash provided by operating activities $                         1,682,000 $                         1,515,000 Net cash provided by operating activities -5% 11%
CASH FLOWS FROM INVESTING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used by investing activities $                        98,467.00 $                        99,810.00 Net cash provided by (used in) investing activities $                       (2,409,000) $                           (367,000) Net cash used by investing activities -1% 556%
CASH FLOWS FROM FINANCING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES
Net change in cash and cash equivalents $                           9,484.00 $                        19,389.00 Net cash (used in) provided by financing activities $                         1,589,000 $                       (1,805,000) Net change in cash and cash equivalenets / Net cash provided by financing activities -51% -1.88

1. Based on your horizontal analysis of Choice Hotels' and Marriott International's operating, investing, and financing activites, which company is most attractive for an acquisition by the equity firm and why?

2. What advice would you give to the client, Choice Hotels, to improve their investing and financing activities?

3. Based only on the statement of cash flow, which company would you invest in and why?

Solutions

Expert Solution

Choice hotel

Merriott Hotel

2015

2016

change in value

% change in value = change in value/value of 2015

2015

2016

change in value

% change in value = change in value/value of 2015

Net cash provided by operating activities

159872

152035

-7837

-4.90%

Net cash provided by operating activities

1515000

1682000

167000

11.02%

Net cash used by investing activities

99810

98467

-1343

-1.35%

Net cash used by investing activities

-367000

-2409000

-2042000

556.40%

CASH FLOWS FROM FINANCING ACTIVITIES

19389

9484

-9905

-51.09%

CASH FLOWS FROM FINANCING ACTIVITIES

-1805000

1589000

3394000

-188.03%

1- It is better to investment in Merriott hotel because it operating cash flow is Positive and its investment in investing activities is increasing while cash flow from financing activities is decreasing it means it is investing in assets and making payment of liabilities and owners capital.

2-

Choice hotel should invest in investing activities and its cash flow from operating activities is also low

3-

I would choose Merriott hotel because its cash flow from operating and investing activities is positive and financing charges are decreasing


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