Hyatt Hotels Corporation (H)

Short-term

Turnover ratios

The activity ratios of Hyatt Hotels Corporation provide insights into the efficiency of the company's operations and management of working capital.

1. Inventory turnover: This ratio measures how many times a company's inventory is sold and replaced over a period. Hyatt Hotels' inventory turnover has been consistently high, indicating effective management of its inventory levels. The significant increase from 2020 to 2021 suggests a more efficient inventory management strategy.

2. Receivables turnover: This ratio reflects how quickly a company collects cash from its credit sales. Hyatt Hotels' receivables turnover has been relatively stable over the years, showing the company's ability to efficiently collect payments from customers.

3. Payables turnover: The payables turnover ratio indicates how quickly a company pays off its suppliers. Hyatt Hotels has shown a decreasing trend in payables turnover, which could imply a longer payment period to suppliers. However, a lower ratio may also indicate better cash management and negotiation power with suppliers.

4. Working capital turnover: This ratio measures how effectively a company utilizes its working capital to generate sales. The absence of data for working capital turnover in recent years suggests a lack of information or a significant change in reporting. However, the previous data points indicate that Hyatt Hotels was utilizing its working capital efficiently to generate sales.

Overall, Hyatt Hotels Corporation appears to have solid efficiency in managing its inventory and collecting receivables. The decreasing trend in payables turnover should be further analyzed to understand the company's payment strategies. The missing data for working capital turnover limits a comprehensive analysis of the company's overall working capital management efficiency.

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Average number of days

The activity ratios of Hyatt Hotels Corporation provide insights into the efficiency of the company's operations over the years.

1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates the number of days it takes for the company to sell its inventory. A lower number suggests faster inventory turnover, which is generally favorable.
- Hyatt Hotels has shown improvement in managing its inventory, with the DOH decreasing from 1.64 days in 2020 to 0.79 days in 2023, indicating efficient inventory management.

2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for the company to collect revenue after making a sale. A lower number signifies faster collection of receivables, indicating efficient credit management.
- Hyatt Hotels experienced fluctuations in DSO over the years, with a significant increase in 2021 followed by a decrease to 48.34 days in 2023. This suggests variability in the company's collection process.

3. Number of Days of Payables:
- This ratio indicates the number of days it takes for the company to pay its suppliers. A longer period may indicate favorable credit terms with suppliers.
- Hyatt Hotels has had fluctuations in the number of days of payables, with a noticeable decrease from 80.75 days in 2021 to 43.19 days in 2023. This suggests a possible improvement in managing payables and liquidity.

Overall, Hyatt Hotels has shown improvements in managing inventory and payables, and has experienced fluctuations in sales collection efficiency over the years. Further analysis in conjunction with other financial metrics would provide a more holistic view of the company's operational efficiency.

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Long-term

The fixed asset turnover ratio for Hyatt Hotels Corporation has shown a consistent upward trend over the past five years, indicating an improvement in the company's efficiency in generating revenue from its fixed assets. The ratio increased from 1.46 in 2019 to 2.85 in 2023, reflecting a significant enhancement in asset utilization.

In contrast, the total asset turnover ratio demonstrates a more erratic pattern, with fluctuations in performance over the same period. The ratio peaked at 0.60 in 2019, dropped to 0.23 in 2020, and then gradually recovered to 0.52 in 2023. Despite the fluctuations, the overall trend suggests a moderate improvement in the company's ability to generate revenue from its total assets.

Overall, while the fixed asset turnover ratio displays a more stable and positive trend, indicating increased efficiency in utilizing fixed assets to generate revenue, the total asset turnover ratio shows a more volatile pattern with improvements in recent years. It is essential for Hyatt Hotels Corporation to continue monitoring and managing both ratios effectively to ensure optimal utilization of assets and sustained revenue generation in the long term.