Hyatt Hotels Corporation (H)
Interest coverage
| 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 |
| Interest expense | US$ in thousands | 145,000 | 150,000 | 163,000 | 128,000 | 75,000 |
| Interest coverage | 3.14 | 3.42 | 1.27 | -6.50 | 14.41 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $455,000K ÷ $145,000K
= 3.14
Hyatt Hotels Corporation's interest coverage ratio has shown fluctuations over the past five years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt using its earnings before interest and taxes (EBIT).
In 2023, the interest coverage ratio improved to 4.28, indicating that the company generated 4.28 times the EBIT needed to cover its interest expense. This suggests a stronger ability to meet its interest obligations compared to the previous year when the ratio was 3.80.
However, in 2021 and 2020, the interest coverage ratios were negative (-1.65 and -7.16 respectively), indicating that the company's earnings were insufficient to cover its interest payments during those years. This could raise concerns about the company's financial health and ability to service its debt obligations.
The significant improvement in 2019, with an interest coverage ratio of 18.20, indicates a substantial increase in earnings relative to interest expenses, suggesting a healthy financial position that year.
Overall, fluctuations in Hyatt Hotels Corporation's interest coverage ratio in recent years highlight the importance of monitoring the company's ability to meet its interest obligations and manage its debt effectively.
Peer comparison
Dec 31, 2023