Hyatt Hotels Corporation (H)

The solvency ratios of Hyatt Hotels Corporation indicate the company's ability to meet its long-term financial obligations and handle debt effectively. Looking at the trends over the past five years:

1. Debt-to-assets ratio: There has been a generally decreasing trend from 2019 to 2023, indicating that the company has been able to reduce its reliance on debt to finance its assets.

2. Debt-to-capital ratio: This ratio has remained relatively stable over the years, hovering around 0.46 to 0.53. This suggests that Hyatt Hotels Corporation's debt level compared to its total capital has been consistent.

3. Debt-to-equity ratio: There was a notable increase from 2019 to 2021, peaking at 1.12, before decreasing in the following years. This indicates fluctuations in the company's reliance on debt compared to equity for financing its operations.

4. Financial leverage ratio: The financial leverage ratio has shown an increasing trend over the years, reaching a peak of 3.60 in 2023. This suggests that the company's reliance on debt to finance its operations and investments has been on the rise.

Overall, while the debt metrics of Hyatt Hotels Corporation have shown some fluctuations, the company has maintained a relatively healthy solvency position, with a decreasing trend in debt-to-assets ratio but increasing trend in financial leverage ratio. It will be important for stakeholders to closely monitor these ratios to ensure the company's ability to manage its debt levels effectively and sustain its financial stability.

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Coverage ratios

Interest coverage is a key financial ratio used to evaluate a company's ability to meet its interest obligations on outstanding debt. In the case of Hyatt Hotels Corporation, the interest coverage ratio has fluctuated over the past five years, indicating varying degrees of financial health and risk.

As of Dec 31, 2023, the interest coverage ratio stood at 4.28, which suggests that Hyatt Hotels Corporation generated 4.28 times the amount of earnings before interest and taxes (EBIT) needed to cover its interest expenses for that period. This indicates a relatively comfortable position in meeting interest payments.

Comparing this to the previous year, the interest coverage ratio was 3.80 as of Dec 31, 2022. Despite a slight decrease from the previous year, the ratio still indicates that the company was able to cover its interest expenses adequately with its operating earnings.

However, in Dec 31, 2021, the interest coverage ratio was negative at -1.65. This negative ratio implies that the company's operating earnings were insufficient to cover its interest expenses during that period. A negative interest coverage ratio raises concerns about the company's ability to meet its debt obligations from its operating income.

Dec 31, 2020, showed an even lower interest coverage ratio of -7.16, indicating a significant deterioration in the company's ability to cover its interest payments. This could suggest financial distress and heightened risk for creditors.

In contrast, Dec 31, 2019, exhibited a notably high interest coverage ratio of 18.20, signifying a robust ability to cover interest expenses with operating income, reflecting a strong financial position.

Overall, fluctuations in Hyatt Hotels Corporation's interest coverage ratio over the past five years demonstrate varying levels of financial health and risk, with the company facing challenges in meeting its interest obligations in certain periods but also demonstrating strength in others. It would be crucial for investors and stakeholders to monitor this ratio closely to assess the company's financial stability and debt repayment capacity.