Wyndham Hotels & Resorts Inc (WH)

Quick ratio

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash US$ in thousands 103,000 66,000 161,000 171,000 493,000
Short-term investments US$ in thousands — -360,000 — — —
Receivables US$ in thousands 271,000 241,000 234,000 246,000 295,000
Total current liabilities US$ in thousands 466,000 459,000 406,000 397,000 346,000
Quick ratio 0.80 -0.12 0.97 1.05 2.28

December 31, 2024 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($103,000K + $—K + $271,000K) ÷ $466,000K
= 0.80

The Quick Ratio, also known as the Acid-Test Ratio, measures a company's ability to pay off its current liabilities using its most liquid assets. A quick ratio of 1 or higher is generally considered satisfactory, indicating that a company has enough liquid assets to cover its short-term obligations.

Analyzing Wyndham Hotels & Resorts Inc's Quick Ratio over the past five years shows a decreasing trend. As of December 31, 2020, the Quick Ratio was a healthy 2.28, indicating a strong ability to cover short-term liabilities with liquid assets. However, by December 31, 2021, the Quick Ratio had decreased to 1.05, still above the threshold of 1 but showing a significant decline.

Subsequently, the Quick Ratio continued to decline, reaching 0.97 by December 31, 2022, and further dropping to -0.12 by December 31, 2023. A Quick Ratio below 1 indicates that the company may struggle to meet its short-term obligations using its current liquid assets.

Although there was a slight improvement by December 31, 2024, with the Quick Ratio rising to 0.80, it still remains below the ideal threshold of 1. This trend suggests that Wyndham Hotels & Resorts Inc may face challenges in meeting its short-term financial obligations with its current level of liquid assets. Further analysis of the company's working capital management and liquidity position would be beneficial in understanding the factors contributing to this deteriorating Quick Ratio.