Wyndham Hotels & Resorts Inc (WH)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.81 | 1.07 | 1.00 | 1.27 | 1.34 | 1.60 | 1.95 | 2.13 | 1.81 | 1.60 | 1.43 | 1.11 | 2.60 | 2.99 | 3.14 | 2.76 | 1.08 | 1.14 | 1.24 | 1.17 |
| Quick ratio | 0.67 | 0.81 | 0.68 | 0.94 | 2.19 | 1.35 | 1.69 | 1.70 | 1.05 | 1.30 | 1.11 | 0.98 | 2.28 | 2.78 | 2.85 | 2.52 | 0.86 | 0.92 | 0.96 | 0.88 |
| Cash ratio | 0.14 | 0.18 | 0.13 | 0.37 | 1.62 | 0.72 | 1.03 | 1.09 | 0.43 | 0.52 | 0.29 | 0.64 | 1.42 | 1.93 | 1.94 | 1.80 | 0.20 | 0.26 | 0.22 | 0.43 |
The current ratio measures the company's ability to pay its short-term obligations with its current assets. A current ratio below 1 indicates that the company may have difficulty meeting its short-term obligations. Wyndham Hotels & Resorts Inc's current ratio has been declining over the past four quarters, from 2.13 in Q1 2022 to 0.81 in Q4 2023. This downward trend raises concerns about the company's liquidity position.
The quick ratio, also known as the acid-test ratio, excludes inventory from current assets to provide a more conservative measure of liquidity. Wyndham Hotels & Resorts Inc's quick ratio mirrors its current ratio, indicating a similar trend of decreasing liquidity from Q1 2022 to Q4 2023. This suggests that the company may struggle to meet its short-term obligations without relying on inventory.
The cash ratio is the most stringent liquidity ratio, measuring the company's ability to cover its current liabilities with cash and cash equivalents. Wyndham Hotels & Resorts Inc's cash ratio also shows a declining trend over the past quarters, indicating a diminishing ability to meet short-term obligations solely with cash on hand. From 1.35 in Q1 2022, the cash ratio dropped to 0.29 in Q4 2023, signaling potential cash flow challenges for the company.
Overall, based on the liquidity ratios, it is evident that Wyndham Hotels & Resorts Inc's liquidity position has weakened over the past year, raising concerns about its ability to meet short-term obligations. Investors and stakeholders should closely monitor the company's liquidity management strategies and cash flow generation in the upcoming quarters.
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 28.16 | 20.03 | -3.44 | 21.24 | 13.39 | 17.61 | 16.77 | 48.54 | 87.79 | 8.27 | 15.36 | 59.45 | 58.42 | 44.27 | 75.96 | 72.06 | 77.24 | 54.69 | 63.56 | 52.63 |
The cash conversion cycle of Wyndham Hotels & Resorts Inc has shown fluctuating trends over the past eight quarters. In Q2 2023, the company recorded a significant decrease in its cash conversion cycle to 26.23 days compared to the previous quarter. This indicates that the company efficiently converted its investments in inventory and accounts receivable into cash during that period.
However, in Q4 2023, the cash conversion cycle increased to 42.44 days, reflecting a longer period required to convert investments into cash. This may suggest challenges in managing working capital effectively or delays in receiving payments from customers.
On a year-over-year basis, the cash conversion cycle has generally shown some variability, with Q4 2022 and Q1 2022 recording relatively lower cycles compared to other quarters. This may indicate seasonal variations or operational changes impacting the company's working capital management.
Overall, it is essential for Wyndham Hotels & Resorts Inc to closely monitor and manage its cash conversion cycle to ensure efficient utilization of resources and optimize cash flow performance.