Hyatt Hotels Corporation (H)

Based on the liquidity ratios of Hyatt Hotels Corporation, there is a notable trend of decreasing liquidity over the years. The current ratio has decreased from 2.60 in 2020 to 0.83 in 2024, indicating a decline in the company's ability to meet its short-term obligations with its current assets.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also exhibited a downward trend from 2.23 in 2020 to 0.76 in 2024. This indicates a diminishing ability to cover immediate liabilities without relying on selling inventory.

The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, has seen a significant drop from 1.91 in 2020 to 0.42 in 2024. This suggests a declining ability of the company to pay off its short-term obligations solely with its cash resources.

Overall, the decreasing trend in all three liquidity ratios for Hyatt Hotels Corporation raises concerns about its liquidity position and ability to meet its short-term financial commitments. It is essential for the company to closely monitor and manage its liquidity to ensure financial stability and sustainability in the future.

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Additional liquidity measure

The cash conversion cycle of Hyatt Hotels Corporation has shown a significant fluctuation over the past five years. The cycle was negative throughout the period, indicating that the company was able to convert its investments in inventory and accounts receivable into cash at a faster rate than paying its accounts payable.

In 2020, the company had a cash conversion cycle of -8.21 days, suggesting a swift conversion of its resources into cash. However, in 2021, this cycle extended significantly to -355.33 days, reflecting a substantial delay in the conversion process. This unprecedented negative figure raises concerns about the efficiency of the company's working capital management during that year.

Subsequently, there was an improvement in 2022 with a cash conversion cycle of -182.88 days, although it still remained negative. This indicates a partial recovery in the efficiency of the company's cash conversion process. In 2023 and 2024, the cash conversion cycle further improved to -160.79 days and -114.72 days, respectively, suggesting continued efforts by Hyatt Hotels Corporation to streamline its working capital management practices.

Overall, the fluctuation in the cash conversion cycle of Hyatt Hotels Corporation over the past five years highlights the importance of effective working capital management in optimizing cash flows and enhancing the company's overall financial performance.