Wyndham Hotels Debt
| WH Stock | USD 96.69 0.30 0.31% |
Wyndham Hotels Resorts holds a debt-to-equity ratio of 1.967. As of now, Wyndham Hotels' Debt Equity Ratio is increasing as compared to previous years. With a high degree of financial leverage come high-interest payments, which usually reduce Wyndham Hotels' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Wyndham Hotels' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Wyndham Hotels' cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Wyndham Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Wyndham Hotels' stakeholders.
Wyndham Hotels Quarterly Net Debt |
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For most companies, including Wyndham Hotels, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Wyndham Hotels Resorts, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Wyndham Hotels' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 12.9013 | Book Value 7.474 | Operating Margin 0.4442 | Profit Margin 0.1829 | Return On Assets 0.081 |
Given that Wyndham Hotels' debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Wyndham Hotels is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Wyndham Hotels to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Wyndham Hotels is said to be less leveraged. If creditors hold a majority of Wyndham Hotels' assets, the Company is said to be highly leveraged.
As of now, Wyndham Hotels' Liabilities And Stockholders Equity is increasing as compared to previous years. The Wyndham Hotels' current Non Current Liabilities Other is estimated to increase to about 252.2 M, while Total Current Liabilities is projected to decrease to under 342.8 M. Wyndham |
Wyndham Hotels Bond Ratings
Wyndham Hotels Resorts financial ratings play a critical role in determining how much Wyndham Hotels have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Wyndham Hotels' borrowing costs.| Piotroski F Score | 7 | Strong | View |
| Beneish M Score | (2.20) | Possible Manipulator | View |
Wyndham Hotels Resorts Debt to Cash Allocation
As Wyndham Hotels Resorts follows its natural business cycle, the capital allocation decisions will not magically go away. Wyndham Hotels' decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors.
Wyndham Hotels Resorts reports 2.21 B of total liabilities with total debt to equity ratio (D/E) of 1.97, which is normal for its line of buisiness. Wyndham Hotels Resorts has a current ratio of 1.57, which is generally considered normal. Note however, debt could still be an excellent tool for Wyndham to invest in growth at high rates of return. Wyndham Hotels Total Assets Over Time
Wyndham Hotels Assets Financed by Debt
The debt-to-assets ratio shows the degree to which Wyndham Hotels uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.Wyndham Hotels Debt Ratio | 29.0 |
Wyndham Hotels Corporate Bonds Issued
Most Wyndham bonds can be classified according to their maturity, which is the date when Wyndham Hotels Resorts has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Wyndham Short Long Term Debt
Short Long Term Debt |
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Understaning Wyndham Hotels Use of Financial Leverage
Understanding the composition and structure of Wyndham Hotels' debt gives an idea of how risky is the capital structure of the business and if it is worth investing in it. The degree of Wyndham Hotels' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt | 37 M | 39.3 M | |
| Short Term Debt | 47 M | 41.7 M | |
| Short and Long Term Debt Total | 2.2 B | 1.9 B | |
| Net Debt | 2.1 B | 1.7 B | |
| Long Term Debt | 2.2 B | 1.8 B | |
| Long Term Debt Total | 2.4 B | 1.7 B | |
| Net Debt To EBITDA | 3.63 | 5.10 | |
| Debt To Equity | 2.91 | 3.05 | |
| Interest Debt Per Share | 26.97 | 13.57 | |
| Debt To Assets | 0.54 | 0.29 | |
| Long Term Debt To Capitalization | 0.74 | 0.42 | |
| Total Debt To Capitalization | 0.74 | 0.39 | |
| Debt Equity Ratio | 2.91 | 3.05 | |
| Debt Ratio | 0.54 | 0.29 | |
| Cash Flow To Debt Ratio | 0.17 | 0.16 |
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Check out the analysis of Wyndham Hotels Fundamentals Over Time. You can also try the Stocks Directory module to find actively traded stocks across global markets.
Is Hotels, Resorts & Cruise Lines space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Wyndham Hotels. If investors know Wyndham will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Wyndham Hotels listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.066 | Dividend Share 1.49 | Earnings Share 3.16 | Revenue Per Share 17.164 | Quarterly Revenue Growth (0.01) |
The market value of Wyndham Hotels Resorts is measured differently than its book value, which is the value of Wyndham that is recorded on the company's balance sheet. Investors also form their own opinion of Wyndham Hotels' value that differs from its market value or its book value, called intrinsic value, which is Wyndham Hotels' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Wyndham Hotels' market value can be influenced by many factors that don't directly affect Wyndham Hotels' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Wyndham Hotels' value and its price as these two are different measures arrived at by different means. Investors typically determine if Wyndham Hotels is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Wyndham Hotels' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.