1 / 12

By: Allie Leon

By: Allie Leon. Market Multiple Valuation. Operations. 3900 lodging properties in 72 countries Controls about 10 % of US hotel market and 1% worldwide Made up of 19 brands Adds hotels to system through franchising Minimizes financial leverage and risk Marriott credit card. Forecasting.

kaseem-richard
Download Presentation

By: Allie Leon

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. By: Allie Leon Market Multiple Valuation

  2. Operations • 3900 lodging properties in 72 countries • Controls about 10 % of US hotel market and 1% worldwide • Made up of 19 brands • Adds hotels to system through franchising • Minimizes financial leverage and risk • Marriott credit card

  3. Forecasting Steps: • Forecast revenues from estimates of sales growth rates • Forecast EPAT from future EPM expectations • Forecast NEA from estimates of future EATO *realistic, not necessarily conservative **Largely affected by a firms business model and the industry -hotel industry is very competitive - Hard to find exact comparables

  4. 1. Estimating Sales Growth -est. growth for MAR is 6% -there is no reason to believe the negative sales growth in 2012 will continue -6% puts Marriott more in line with the competitors in the industry

  5. Return on Net Enterprise Assets (RNEA) RNEA = EPATx Sales_ Sales Avg NEA = EPM x EATO **use EPM and EATO to help forecast can back into an estimation of EPAT and NEA

  6. 2. Estimating EPM • Indicates the profit generated by each dollar of sales • Shows efficiency and cost control EPM = EPAT Sales • The higher the EPM the better • affected by gross profit, which will depend on prices and costs • Competition high in the lodging industry so pricing is competitive

  7. Estimating EPM -est. EPM for MAR is 3.79% -Marriott is lower than competitors, no reason to assume Marriott’s numbers are off -therefore did not factor in the industry percents -removed one time items (FS translation) because the expected future value is 0

  8. 3. Estimating EATO • Indicates the sales generated by each dollar of NEA • Shows efficiency and use of assets generating sales EATO = Sales_ Avg NEA - Generally more stable that EPM because assets don’t fluctuate as much as revenues

  9. Estimating EATO -est. EATO for MAR is 7.13 -Marriott is consistently above competitors, no reason to assume any different

  10. Forecasting EPAT = sales * ETO est. NEA = sales/EATO est.

  11. Questions??

  12. Sources • Marriott International, Inc. 2012 Annual Report • Yahoo Finance • NASDQ

More Related