Wyndham Hotels & Resorts Inc (WH)

The liquidity ratios of Wyndham Hotels & Resorts Inc indicate its ability to meet short-term financial obligations.

The current ratio has been decreasing over the past five years, from 2.60 in 2020 to 0.81 in 2023. This suggests a declining ability to cover current liabilities with current assets, potentially indicating liquidity challenges.

The quick ratio also reflects a declining trend, dropping from 2.60 in 2020 to 0.81 in 2023. This ratio excludes inventory from current assets, focusing on the most liquid assets to cover short-term obligations. The decreasing trend further emphasizes potential liquidity issues.

The cash ratio has also decreased over the years, from 1.75 in 2020 to 0.29 in 2023. This ratio provides a more stringent measure of liquidity by considering only cash and cash equivalents. The declining trend in the cash ratio indicates a decreasing ability to cover short-term liabilities with readily available cash.

Overall, the decreasing liquidity ratios of Wyndham Hotels & Resorts Inc suggest potential challenges in meeting short-term financial obligations. Management may need to closely monitor and address the liquidity position to ensure financial stability and operational continuity.

---

Additional liquidity measure

The cash conversion cycle of Wyndham Hotels & Resorts Inc has shown fluctuation over the past five years. In 2023, the cash conversion cycle increased to 42.44 days from 29.85 days in 2022, indicating a lengthening of the period required to convert inputs into cash inflows. This may be attributed to changes in the company's operating efficiency or its management of accounts receivable, inventory, and accounts payable.

Comparing to the previous years, the company's cash conversion cycle was relatively shorter in 2021 at 32.23 days and 2019 at 34.60 days, suggesting a more efficient utilization of resources and faster conversion of sales into cash during those periods. However, in 2020, the cycle significantly increased to 58.44 days, indicating potential challenges in managing working capital effectively and efficiently.

Overall, it is essential for Wyndham Hotels & Resorts Inc to focus on optimizing its cash conversion cycle to ensure timely cash flows and efficient operations. Analyzing the components of the cycle, such as accounts receivable turnover, inventory turnover, and accounts payable turnover, can provide insights into specific areas for improvement in managing working capital effectively.