Analyzing Financial Reports Assignment
You have made excellent progress on the Choice Hotels project, and your contributions at the recent ethics retreat were well received! Senior Partner Frank Marinara and Managing Director Elisa Izuki have discussed your work and have decided to promote you to senior analyst. “Congratulations!” Frank says. “Because of your great work with Choice Hotels, the client would like us to continue working with them on a new project. I’ll send over the project details to you via email.
This is great news! You are excited about your new title and the progress of MCS and are eager to prove why you were selected for promotion.
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From: Frank Marinara, Director of Finance
I know you will do an outstanding job in your new role and I am looking forward to seeing you continue your positive momentum. I am also being promoted to director, and Elisa will now be serving in a senior director capacity.
This should be a fitting project for you as our newest senior partner. Choice Hotels would now like MCS to complete a financial statement comparison with their largest competitor, Marriott International. Since we need to know how Choice Hotels compares with Marriott, I need you to compare Choice Hotels’ 10-K reports that we gathered in the last project with Marriott International’s 10-K reports. You’ll need to complete a horizontal and vertical financial statement analysis using the 10-K reports from Choice and Marriott.
Choice Hotels is also interested in bolstering their assets to make themselves more attractive to potential investors. As they build these assets, they will need our help analyzing different cost allocation methods and recommending the best one for their circumstances.
Finally, we will need to look at Choice Hotels’ latest 10-Q reports and complete a budget and forecast model to see if they would be an attractive acquisition for a large equity firm. And of course, you will need to host a meeting with the other finance and accounting analysts to discuss whether the equity firm would be more likely to acquire Choice or Marriott.
I’ll need all of these assignments done within two weeks and suggest you begin right away.
Really proud of your efforts here,
rank Marinara Contact Information
Click Step 1 to get started!
When you submit your project, your work will be evaluated using the competencies listed below. You can use the list below to self-check your work before submission.
· 1.3: Provide sufficient, correctly cited support that substantiates the writer’s ideas.
· 1.6: Follow conventions of Standard Written English.
· 3.1: Identify numerical or mathematical information that is relevant in a problem or situation.
· 3.2: Employ mathematical or statistical operations and data analysis techniques to arrive at a correct or optimal solution.
· 3.3: Analyze mathematical or statistical information, or the results of quantitative inquiry and manipulation of data.
· 3.4: Employ software applications and analytic tools to analyze, visualize, and present data to inform decision-making.
· 10.2: Analyze financial statements to evaluate and optimize organizational performance.
· 10.3: Determine optimal financial decisions in pursuit of an organization’s goals.
· 10.5: Develop operating forecasts and budgets and apply managerial accounting techniques to support strategic decisions.
· 12.1: Assess market risk and opportunity.
· 13.1: Identify and analyze new opportunities.
Step 1: Compare Business Performance Using Financial Statements
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Choice Hotels International (NYSE:CHH) would like to know how their market share compares with Marriott International (NASDAQ:MAR), their largest competitor in North America. This comparison will help Choice Hotels develop a strategy to gain a competitive advantage over Marriott.
Choice would like MCS to first complete a financial statement analysis with Marriott International.
Dialogue with Frank Marinara
“Use the Choice Hotels 10-K reports we gathered in the last project and compare them with Marriott International’s 10-K reports,” Frank tells you. You will need to find Marriott’s 10-K reports the same way you did for Choice Hotels, by accessing the Securities Exchange Commission (SEC) website.
Frank continues, “Choice has asked for advice on attracting new investors. You need to complete a horizontal analysis and vertical analysis by comparing financial reports and measuring the difference between the two companies.” Frank recommends using financial ratios for analysis and cost-volume-profit analysis concepts for this task. “I’ll email you an Excel Workbook to complete for this project.”