Strategy
Business
Name
Institution
Marriot Hotel
In some cases, organizations may decide to retain some of its profits instead of paying dividends. These funds are used to support various activities. These sources are referred to as the retained earnings to an organization such as Marriot hotel. The hotel utilizes funds, which could have been distributed to shareholders to finance further investment such as expansion, marketing and promotion. It may use the funds to support research and development, paying off debts, buying machines and equipments, acquiring assets. Retained earnings for Marriott hotel are cumulative and consist of reinvested funds. This method of acquiring capital is beneficial because it could help the hotel expand without borrowing funds. Retaining its earning is considered as a cheap method of acquiring capital.
When Marriot’s hotel utilizes leverage as a source of earnings, it means it would realize investments through borrowing funds. The hotel may decide to borrow capital and financial instrument to support its activities aimed at enhancing development project. Through leverage, Marriot hotel can finance various assets and thus realize its targets and objectives. When Marriot uses debts to finance its projects and operations, it increases its leverage. The improvement is realized because it achieves investment without having to use its equity. Leverage is beneficial to both the firm and investor because it facilitates better investments and operations. Leverage may include various sources of capital such as borrowing, mortgages and loans. This method of acquiring capital is beneficial because the hotel would realize invest and manage to maintain its other activities. Through this, hotel would create better opportunities for expansion and growth. It would be better placed to outdo it competitors and attract many customers.
Name
Institution
Marriot Hotel
In some cases, organizations may decide to retain some of its profits instead of paying dividends. These funds are used to support various activities. These sources are referred to as the retained earnings to an organization such as Marriot hotel. The hotel utilizes funds, which could have been distributed to shareholders to finance further investment such as expansion, marketing and promotion. It may use the funds to support research and development, paying off debts, buying machines and equipments, acquiring assets. Retained earnings for Marriott hotel are cumulative and consist of reinvested funds. This method of acquiring capital is beneficial because it could help the hotel expand without borrowing funds. Retaining its earning is considered as a cheap method of acquiring capital.
When Marriot’s hotel utilizes leverage as a source of earnings, it means it would realize investments through borrowing funds. The hotel may decide to borrow capital and financial instrument to support its activities aimed at enhancing development project. Through leverage, Marriot hotel can finance various assets and thus realize its targets and objectives. When Marriot uses debts to finance its projects and operations, it increases its leverage. The improvement is realized because it achieves investment without having to use its equity. Leverage is beneficial to both the firm and investor because it facilitates better investments and operations. Leverage may include various sources of capital such as borrowing, mortgages and loans. This method of acquiring capital is beneficial because the hotel would realize invest and manage to maintain its other activities. Through this, hotel would create better opportunities for expansion and growth. It would be better placed to outdo it competitors and attract many customers.