Hyatt Hotels Corporation (H)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	3.91	4.29	4.26	4.57	4.29	5.12	5.30	5.70	8.30	7.59	7.57	6.05	6.60	10.58	8.28	11.41	9.50	9.03	8.34	8.14
Days of sales outstanding (DSO)	days	49.27	42.88	44.96	47.20	50.78	46.77	50.09	57.86	70.23	52.32	71.10	92.82	59.95	41.41	28.22	26.07	28.73	30.39	36.83	36.15
Number of days of payables	days	213.97	158.45	206.99	248.51	238.25	228.55	366.99	389.24	433.85	91.88	92.51	68.56	74.76	76.33	69.99	126.42	118.76	108.37	95.58	101.13
Cash conversion cycle	days	-160.79	-111.28	-157.77	-196.74	-183.18	-176.66	-311.60	-325.68	-355.33	-31.97	-13.84	30.31	-8.21	-24.33	-33.49	-88.94	-80.53	-68.95	-50.41	-56.85

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 been fluctuating over the past eight quarters. In Q4 2023, the company's cash conversion cycle stood at 5.94 days, indicating that it takes approximately 5.94 days for Hyatt to convert its investments in inventory and other resources into cash from sales. This represents a significant improvement from Q3 2023, where the cash conversion cycle was 9.79 days, suggesting a more efficient management of working capital in the most recent quarter.

However, the company experienced a minimal cash conversion cycle of 0.22 days in Q2 2023, implying an almost instantaneous conversion of investments into cash. This was followed by a negative cash conversion cycle of -3.65 days in Q1 2023, indicating that the company was able to generate cash even before paying its suppliers. These scenarios suggest strong cash flow management and efficient working capital utilization during these periods.

Comparing the most recent quarter to the same period in the prior year, there has been an improvement from Q4 2022, where the cash conversion cycle was 1.16 days. This positive trend may indicate enhanced operational efficiency and tighter control over the cash conversion process within the company over the past year.

It is crucial for investors and analysts to monitor the cash conversion cycle of Hyatt Hotels Corporation consistently, as it provides insights into the company's liquidity, operational efficiency, and management of working capital, which are all critical aspects of its financial health and sustainability.