the financial position of the business
From the financial position of the business, it is evident that Marriott has better returns on the investment than choice hotels. Comparing the income statements of the two reveals that Marriott has sound business choices than Choice hotels. With both the two cash inflows being in financing activities and purchasing of treasury stocks.
Marriott has a profit after tax margin than shows that id is doing well as compared to choice. This can be attributed to significant market share or good investment choices that Marriott has been making over the last financial period.
The debt asset ratio is smaller in Marriott than in choice, only showing that option has a huge debt burden as compared to Marriott. This makes Marriott attractive to investors who will always want to invest in entities that do not have a high debt burden. Marriot management has made it possible for the investors not to get fewer returns on invested capital as compared to the choice management who have burdened the business with huge burdens chasing away potential investors.
There have been lower royalty revenue in choice hotels that might have been an indicator of the choice hotel losing contact with his customers, Marriott on the other hand is gaining momentum in the market sector as they are acquiring mergers and also getting some more revenue from other income, this simply means that the investor confidence has grown when it comes to investing in Marriott. This is also an indicator that competitors are falling out due to Marriott that is why Marriott can buy mergers with other companies.
Choice company management should reduce on their debt and increase the revenue. They have increased their expenditure yet no revenuer is coming, this has resulted in the loss of investor confidence. They need to check on the choice of their business and work hard on their weaknesses to improve their strengths. This is the only way they will bring back the investor confidence.