Hyatt Hotels Corporation (H)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 12,833,000 | 12,312,000 | 12,603,000 | 9,129,000 | 8,417,000 |
| Total stockholders’ equity | US$ in thousands | 3,564,000 | 3,699,000 | 3,563,000 | 3,211,000 | 3,962,000 |
| Financial leverage ratio | 3.60 | 3.33 | 3.54 | 2.84 | 2.12 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $12,833,000K ÷ $3,564,000K
= 3.60
The financial leverage ratio of Hyatt Hotels Corporation has shown an increasing trend over the past five years, indicating a gradual rise in the company's reliance on debt to finance its operations and investments.
The financial leverage ratio increased from 2.12 in 2019 to 3.60 in 2023. This suggests that the proportion of debt in the company's capital structure has been growing significantly during this period. The ratio peaked in 2023, reaching its highest level of 3.60, which may signal a higher risk associated with the company's financial position.
It is important to note that a higher financial leverage ratio can magnify the company's earnings and returns on equity when the company is performing well, but it can also increase the financial risk and vulnerability to economic downturns or changes in interest rates.
Overall, the increasing trend in Hyatt Hotels Corporation's financial leverage ratio reflects a strategic decision to utilize debt financing to support the company's growth and expansion initiatives, but it also warrants close monitoring to ensure the company can manage its debt levels effectively and sustainably.
Peer comparison
Dec 31, 2023