Wyndham Hotels & Resorts Inc (WH)

Current ratio

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Total current assets	US$ in thousands	467,000	373,000	545,000	720,000	900,000
Total current liabilities	US$ in thousands	466,000	459,000	406,000	397,000	346,000
Current ratio		1.00	0.81	1.34	1.81	2.60

December 31, 2024 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $467,000K ÷ $466,000K
= 1.00

The current ratio of Wyndham Hotels & Resorts Inc has exhibited a declining trend over the past five years, falling from 2.60 in December 2020 to 1.00 in December 2024. A current ratio above 1 indicates that the company has more current assets than current liabilities to cover its short-term obligations. However, the decreasing trend of the current ratio may raise concerns about the company's ability to meet its short-term financial commitments efficiently.

In December 2020, the current ratio was robust at 2.60, indicating a strong ability to cover short-term liabilities with current assets. However, this ratio steadily decreased to 1.81 in December 2021 and further to 1.34 in December 2022, suggesting a potential strain on liquidity. By December 2023, the current ratio dropped significantly to 0.81, indicating a potential liquidity crunch where current liabilities exceeded current assets. Although the ratio slightly improved to 1.00 by December 2024, it still remains at a level where there may be difficulty in meeting short-term obligations.

The decreasing current ratio trend over the years may signal operational inefficiencies, difficulty in managing working capital, or increased short-term debt obligations relative to current assets. Stakeholders and investors may closely monitor this ratio to assess the company's liquidity position and its ability to meet short-term obligations as they become due. It is essential for Wyndham Hotels & Resorts Inc to closely monitor and manage its current assets and liabilities to improve its liquidity position and financial health.