Hyatt Hotels Corporation (H)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 455,000 | 513,000 | 207,000 | -832,000 | 1,081,000 |
| Long-term debt | US$ in thousands | 2,305,000 | 2,453,000 | 3,968,000 | 2,984,000 | 1,612,000 |
| Total stockholders’ equity | US$ in thousands | 3,564,000 | 3,699,000 | 3,563,000 | 3,211,000 | 3,962,000 |
| Return on total capital | 7.75% | 8.34% | 2.75% | -13.43% | 19.39% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $455,000K ÷ ($2,305,000K + $3,564,000K)
= 7.75%
Hyatt Hotels Corporation's return on total capital has exhibited variability over the past five years. In 2023, the return on total capital stands at 4.59%, showing a decline from the previous year's 5.92%. This decrease indicates that the company's ability to generate profits from its total invested capital weakened in 2023.
Looking back at the trend, Hyatt Hotels Corporation experienced negative returns on total capital in both 2021 and 2020, with -2.96% and -10.88% respectively. These figures suggest that the company struggled to generate positive returns from its total capital during those years, potentially indicating operational challenges or inefficient use of resources.
However, in 2019, Hyatt Hotels Corporation achieved a notably high return on total capital of 16.29%, signaling a strong performance in efficiently utilizing the capital invested in the business.
In summary, while Hyatt Hotels Corporation has shown fluctuations in its return on total capital over the past five years, the recent decline in 2023 raises concerns about its ability to generate satisfactory returns for investors relative to the capital employed. Monitoring and improving this metric will be crucial for the company's financial health and performance going forward.
Peer comparison
Dec 31, 2023