Hyatt Hotels Corporation (H)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3.91 | 4.28 | 8.30 | 6.60 | 9.24 |
| Days of sales outstanding (DSO) | days | 49.27 | 50.78 | 70.23 | 59.95 | 26.99 |
| Number of days of payables | days | 213.97 | 237.94 | 433.85 | 74.76 | 115.51 |
| Cash conversion cycle | days | -160.79 | -182.88 | -355.33 | -8.21 | -79.28 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.91 + 49.27 – 213.97
= -160.79
The cash conversion cycle of Hyatt Hotels Corporation has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle was 5.94 days, indicating that on average it takes approximately 5.94 days for the company to convert its investments in inventory and other resources into cash from sales. This represents a significant increase from the previous year's level of 1.16 days.
In 2022, the company had a very short cash conversion cycle of 1.16 days, suggesting efficient management of inventory and accounts receivable, enabling Hyatt Hotels Corporation to quickly convert its assets into cash. However, in 2021, the company had a negative cash conversion cycle of -2.90 days, which implies that the company was able to collect cash from customers before paying its own suppliers, resulting in a short cash conversion cycle.
Conversely, in 2020, the cash conversion cycle was 38.87 days, indicating a significant increase in the time it took for the company to convert its resources into cash. This increase may have been influenced by various factors such as changes in sales trends, inventory management, or payment terms with suppliers. In contrast, in 2019, the cash conversion cycle was at a more moderate level of 17.71 days.
Overall, fluctuations in the cash conversion cycle of Hyatt Hotels Corporation over the past five years suggest varying levels of efficiency in managing working capital and converting resources into cash. Monitoring and analyzing these trends can provide insights into the company's operational effectiveness and financial health.
Peer comparison
Dec 31, 2023