Homework 4 & 5
Subject: Business-to-Business Marketing
Paper Model: APA
Paper Type: other
Total Words: 1416
Document Outline
Home Work 4
Marriot bought Starwood’s, determine the fair value of Starwood of 2014 and what premium did Marriot actually paid.
Comparison of Fair value and current market share price
Marriot Underpaid to buy Starwood
Document Preview
Home Work 4
Please use the Starwood Equity Analysis Spreadsheet to analyze Intercontinental Hotel (IH) buyout possibility.
StarwoodEquity Analysis spreadsheet is used to analyze the company’s financials, ratio analysis, and forecasting to explore the buyout possibility for Intercontinental Hotel (IH). Before, discussing the equity, it is important to analyze the growth rates, market size of industry, intensity of competition in hospitality and tourism sector. Hospitality industry has faced intense competition in recent decade or so and demand for luxury and upscale hotels have increased significantly. However, recent financial crises of 2007-08 and subsequent slowdown in global economy had resulted in slowdown in demand for luxury accommodation. But, it must be emphasized that recent consolidations and takeovers have reduced the competition in the industry. Therefore, it will be a step forward, if IH could buy the Starwood and increases its market share and consolidate its position in this growing and intensely competitive global hotel market.
Now, once the economic realities behind the business are analyzed, financial statement analysis is performed. Based, on the historical performances of the company from financial year (FY) 2007 to FY14, key financial ratios are analyzed. If we look at the liquidity position of the company, company’s position had shown the fluctuations and company’s short term financial position had deteriorated, and company could struggle to pay its short term lenders and creditors, as its short term liability is greater than its current assets. However, company’s current receivable turnover has remained stable at 6.61 % in last 2 years, showing the stability recovering cash from its receivables in a year. Other solvency measures such as LTD/ Capitalization indicates thatcompany has increased its reliance on debt and increase in its LTD/Capitalization from 32.6% to 53.2% indicated that Starwood had increased its long term borrowing and its leveraging position deteriorated. With increase in its long-term borrowing, LTD/EBITDA has also increased showing that amount required to pay off long terms has increased as compared to earnings of the company.
The profitability ratios of the Starwood indicate that company’s gross margin profitability has witnessed the increasing trend in last few years reaching 70.8% in FY14from 62.8% in FY12. Similarly, EBITDA had also shown increasing trend, however, they declined marginally in FY14. Return on equity had increased in FY14, but had seen constant decline since FY08 form 42% to 16.7% in FY14, which showed that company had failed to improve on generating returns for its shareholders, which indicates that company has lost its ability to generate returns of rots shareholders. In addition, Starwood has also shown continues decline in its revenue growth except an increase of 12.4% in FY12.Howeever, margin of decline in revenue growth had continuously decreased in recent years, as world economy was performing better than before and demand for hotel rooms increased and tourism has also flourished in last 3 years.
Though, Starwood had Starwood showed positive cash flow in FY13 after posting negative cash flow in FY11 & FY12. Net operating cash flows had declined in FY14 considerably after posting increase in FY12 and 13. The major reason for decline in net cash and cash equivalent was sale purchase of stock and increase in dividend paid in FY14. The sale of stock was so huge that massive increase in borrowing was not enough to improve the cash position of the company.
Click the button above to view the complete essay, speech, term paper, or research paper
Tags
Related Uploads
Research & Analysis of Business Problems
Subject: Business-to-Business Marketing
Model: APA
Type: Research Paper
Words: 410
My personal journal entries for last week
Subject: Business-to-Business Marketing
Model: APA
Type: Assignment
Words: 348
Numerical summary of grading policy
Subject: Consumer Behavior
Model: APA
Type: Case Study
Words: 738
Guidelines for Homework Assignments
Subject: Consumer Behavior
Model: APA
Type: Assignment
Words: 175
Steps necessary to complete the project
Subject: Consumer Behavior
Model: APA
Type: Assignment
Words: 4955
Slip-Sliding away, down the ethical slope
Subject: Consumer Behavior
Model: APA
Type: Essay
Words: 948
Assessment of early childhood mathematics
Subject: Consumer Behavior
Model: APA
Type: Assignment
Words: 606
Homework # 4 Incident at Morales & My Sister’s Keeper Mohammad H Al Hawashim
Subject: Consumer Behavior
Model: APA
Type: Assignment
Words: 1298
Impact of Parental Involvement on Student’s Motivation: A Case study of University of Central Punjab
Subject: Marketing Research
Model: APA
Type: Assignment
Words: 3292
AmaeriTech is the company dealings in the computer supplies in North Carolina
Subject: Consumer Behavior
Model: APA
Type: Case Study
Words: 906
Recent Documents
- Commonalities in varied problems
- The coca cola company operations management
- Inequitably During Job
- Making Layoff decision under Arkansas age discrimination in employment act (ADEA)
- Intercontinental Hotel with hotel industry issue (bed bugs)
- Current Events (Economics Quiz)
- Leadership flaws in Engineers ABC
- Creative and Innovative Management
- Discopress Case Study
- on Multichannel Retailing
- Activity Total Benefit – Total Cost Exercise
- Describe the three key elements of motivation
- Describe three components of an attitude. Give an example for each
- Case Analysis On Apple’s Winning Marketing Strategy
- Creates Constancy of Purpose for Improvement of Product & Service
- : Give a description for the following terms
- Processing time of loan
- What is the core of Chinese educational philosophy
- Exam On Strategic Management
- Tannen Wears Jump Suits, Sensible Shoes
- Is there a relationship between States owned vehicles and fuel consumption in US
- What does Tannen mean that women are “marked?”
- What Is Wind Energy
- Starboard Builds 3.7% Stake in Advance Auto Parts
- Why did Levi's consider selling their jeans at Wal-Mart
- Collection, Organization & Interpretation of Information
- Executive Summary (Technically no title is necessary for an Executive Summary)
- How does Swift return us to the world of a more or less normal travel narrative at the end of the book
- Personal Culture Report
- on Case Analysis and Question & Answers
- Diagram Models On Systems Modeling and Simulation
- What are some of the potential benefits of a more formalized approach to forecasting
- What did Snapple do in the past two years so that you have more likes on Facebook than the market leader, Amazon Tea
- How do I feel about the drinking age be lowered then 18
- Neural Responses to Smoking Stimuli Are Influenced by Smokers' Attitudes towards Their Own Smoking Behaviour
- You have an opportunity to pitch a movie version of Tennyson's " Ulysses" to a Hollywood studio
- What is his main message in this communication to CEOs
- Cold war continues: coke and Pepsi in 2006
- Discussion on Strategy in Emerging Markets
- Interview Of George Charlie President of GC Atlantic
- Reflection Paper On Renewable Wind Energy Purchasing
- Reflection Paper On Appendix A Applied Research
- Business relationship and contracts
- Forecasting of Energy consumption from Wind:
- Security Weaknesses in Arbitrated Quantum Signature Protocols
- on Leadership Skills & its Measurements
- Answering brief questions Management
- Financial Analysis Of Regions Bank
- Case Analysis On Oprah Winfrey’s Dream School for Impoverished South African Girls
- Event reflection on Turbulent Waters: Challenges Facing America’s Colleges and Universities