In: Finance
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?
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. |
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2- |
Choice hotel should invest in investing activities and its cash flow from operating activities is also low |
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3- |
I would choose Merriott hotel because its cash flow from operating and investing activities is positive and financing charges are decreasing |