Hyatt Hotel Corporation, USA - Financial Analysis



Abstract

Hospitality industry has grown much in the US over the period of time. Hyatt Hotel Corporation holds a major share in it. However, to identify the patterns of growth i.e. either it is consistent or rampant in growing; financial analysis can significantly help in this regard. The report aims to contain financial analysis of Hyatt Hotel Corporation that will include three year horizontal analysis, liquidity analysis and their interpretations combined with remedies & recommendations. It will highlight the positive and negative trends and the liquidity status of the company.

Introduction1

Company Overview1

Horizontal Analysis2

Significance & Essentiality2

Interpretations4

Interpretations6

Ratio Analysis6

Definition & Importance6

Liquidity Ratios & Issues6

Current Ratio - Interpretation7

Quick (Acid-test) Ratio - Interpretation7

Cash-to-Current Liabilities Ratio - Interpretations7

Conclusion & Recommendations8

References9

Hyatt Hotel Corporation, USA - Financial Analysis

Introduction

Financial analysis helps the investors and creditors to know about various relevant variables of the company. Financial analysis assists stakeholders to understand the company using ratio analysis & common-size statements i.e. horizontal & vertical analysis. It helps the company in taking long-term and even in short-term decisions. Therefore, financial analysis has significantly influenced the internal management of the organizations too.

Company Overview

Hyatt Hotel Corporation, USA is one of the market leaders in the hospitality industry. The business is owned by Pritzker family. It has been widespread and located in various regions across the globe. The company went global in the era of 1969. It has segmented its business operations into three main segments i.e. US, ASPAC (Southeast Asia, Australia, South Korea, China & Japan) and in EAME/SW (Europe, Africa, Middle East & Southwest Asia). Its key competitors are Marriot International Inc., Hilton Hotels & Resorts and InterContinental Hotels Group PLC.

Brands of Hyatt Hotel Corporation are Park Hyatt, ANdAZ, Grand Hyatt, Hyatt, Hyatt Regency, Hyatt Place, Hyatt House and Hyatt Residency Club. Company employs around 95,000 employees, directly & indirectly as of June 30th, 2012. It holds about 492 properties in its portfolio, globally. Hyatt's competitive strengths (Annual Report, 2012) are:

Consistent in receiving laureates & recognition due to its world class services & brands.

Strong market penetration & presence scattered in various urban centers.

Rich organizational culture and highly experienced employees.

Strong capital base & higher creditworthiness with a higher liquidity & capacity to borrow.

Holding diversified lines of businesses.

Deals with innovation & unique service model as an integral part of the business.

Horizontal Analysis

Significance & Essentiality

Financial analysis results in a need of comparative analysis, which analysts use to do for various purposes. Comparative analysis is usually conducted on three major reasons i.e. comparing the company with itself, industry averages and with competitors (Weygandt et. al, 2012). ). Horizontal analysis lies within the category of intraorganizational comparisons. Intraorganizational comparisons are useful, as it helps in identifying the changes in key relationships & trends of financial values, stated in financial statements. Though ratio analysis also provides the user of financial information a very good insight of the financial condition & performance of the company, still common-size analysis is important because it also includes those considerations that were foregone whilst doing ratio ...