Wyndham Hotels & Resorts Inc (WH)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.58 | 0.60 | 0.58 | 0.55 | 0.55 | 0.53 | 0.51 | 0.51 | 0.50 | 0.49 | 0.49 | 0.48 | 0.49 | 0.48 | 0.49 | 0.56 | 0.56 | 0.58 | 0.59 | 0.55 |
| Debt-to-capital ratio | 0.79 | 0.81 | 0.80 | 0.77 | 0.75 | 0.72 | 0.70 | 0.69 | 0.68 | 0.66 | 0.65 | 0.64 | 0.66 | 0.65 | 0.66 | 0.72 | 0.73 | 0.75 | 0.75 | 0.72 |
| Debt-to-equity ratio | 3.79 | 4.27 | 3.90 | 3.32 | 2.95 | 2.52 | 2.34 | 2.22 | 2.16 | 1.97 | 1.90 | 1.79 | 1.91 | 1.86 | 1.97 | 2.62 | 2.70 | 2.94 | 3.05 | 2.56 |
| Financial leverage ratio | 6.50 | 7.13 | 6.66 | 6.03 | 5.41 | 4.79 | 4.61 | 4.36 | 4.29 | 3.99 | 3.88 | 3.70 | 3.92 | 3.84 | 4.00 | 4.68 | 4.82 | 5.08 | 5.20 | 4.64 |
Wyndham Hotels & Resorts Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio:
The trend of the debt-to-assets ratio has been relatively stable, ranging between 0.48 to 0.60 over the past few years. This ratio indicates that around 48% to 60% of the company's total assets are financed by debt.
2. Debt-to-capital ratio:
The debt-to-capital ratio has shown a slight increasing trend, from 0.64 to 0.81, indicating that the proportion of debt in the company's capital structure has been increasing steadily. This may imply that the company is relying more on debt to fund its operations and growth.
3. Debt-to-equity ratio:
The debt-to-equity ratio has exhibited a significant increase from 1.79 to 4.27 over the analyzed period. This suggests that the company is increasingly relying on debt rather than equity to finance its operations and expansion, which could potentially indicate higher financial risk.
4. Financial leverage ratio:
The financial leverage ratio has been on an upward trajectory, rising from 3.70 to 7.13, reflecting an increasing reliance on debt to finance the company's assets. A higher financial leverage ratio indicates higher financial risk and could make the company more vulnerable to economic downturns or interest rate changes.
Overall, the analysis of Wyndham Hotels & Resorts Inc's solvency ratios suggests a trend of increasing leverage and reliance on debt over the analyzed period, which may raise concerns about the company's long-term financial stability and ability to meet its debt obligations.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 4.00 | 3.86 | 4.03 | 4.05 | 4.90 | 5.26 | 5.59 | 6.13 | 6.86 | 6.80 | 6.73 | 6.24 | 4.64 | 3.53 | 2.48 | -0.34 | -0.41 | 0.34 | 0.32 | 2.86 |
Interest coverage is a financial ratio that measures a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by interest expense. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
Analyzing Wyndham Hotels & Resorts Inc's interest coverage ratio over the period from March 31, 2020, to December 31, 2024, reveals fluctuations in the company's ability to cover its interest expenses. The interest coverage ratio started at 2.86 in March 2020, indicating that the company's earnings were 2.86 times its interest expense. However, by December 2020, the ratio had declined significantly to -0.41, indicating that the company's earnings were insufficient to cover its interest payments.
From December 2020, Wyndham Hotels & Resorts Inc's interest coverage ratio improved steadily, reaching a peak of 6.86 by December 31, 2022. This upward trend demonstrates the company's strengthened ability to meet its interest obligations through increased earnings relative to interest expenses. However, the ratio experienced a slight decline in the subsequent periods, stabilizing around 4.00 by December 31, 2024.
Overall, the trend in Wyndham Hotels & Resorts Inc's interest coverage ratio indicates improvements in the company's financial health and its ability to cover interest expenses. Despite some fluctuations, the company has managed to enhance its earnings capacity relative to its interest obligations over the analyzed period.