Hilton Grand Vacations Inc (HGV)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities. In the case of Hilton Grand Vacations Inc, let's analyze the activity ratios:

1. Inventory turnover:
- The inventory turnover ratio measures how effectively the company is managing its inventory. A decreasing trend in the inventory turnover ratio over the years indicates slower sales in comparison to the amount of inventory held. Hilton Grand Vacations Inc's inventory turnover has been fluctuating, with a significant decrease from 2022 to 2023.

2. Receivables turnover:
- The receivables turnover ratio reflects how quickly the company collects outstanding receivables. Hilton Grand Vacations Inc has maintained a relatively stable receivables turnover ratio over the years, indicating a consistent collection of receivables. A high turnover ratio suggests efficient management of accounts receivable.

3. Payables turnover:
- The payables turnover ratio indicates how efficiently a company is paying its suppliers. Hilton Grand Vacations Inc's payables turnover ratio has been volatile, with significant fluctuations from 2020 to 2022. A lower ratio may suggest a longer payment period to suppliers, while a higher ratio indicates a shorter payment period.

4. Working capital turnover:
- The working capital turnover ratio measures how effectively the company generates revenue from its working capital. A higher ratio suggests efficient utilization of working capital. Hilton Grand Vacations Inc has shown fluctuations in its working capital turnover ratio over the years, but generally, it has maintained a moderate level of turnover.

Overall, Hilton Grand Vacations Inc's activity ratios reveal varying levels of efficiency in managing its inventory, receivables, payables, and working capital. The company may need to focus on improving inventory turnover and maintaining stable payables turnover to enhance its operational efficiency.

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Average number of days

Based on the activity ratios provided for Hilton Grand Vacations Inc, we can assess its efficiency in managing its inventory, receivables, and payables over the years.

1. Days of Inventory on Hand (DOH):
- Hilton Grand Vacations Inc's inventory turnover has varied significantly over the past five years, ranging from a low of 1,555.91 days in 2022 to a high of 9,776.79 days in 2020.
- A lower DOH indicates better inventory management, as it shows the number of days it takes for the company to sell its inventory.
- In 2023, the company's DOH of 2,634.02 days suggests that the company is holding inventory for an extended period, which may tie up capital and potentially lead to obsolete inventory issues.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects Hilton Grand Vacations Inc's ability to collect its accounts receivable from customers.
- The DSO has ranged from 34.55 days in 2019 to 50.25 days in 2022, indicating fluctuations in the collection period over the years.
- A lower DSO is favorable as it means the company is collecting payments from customers faster, improving cash flow.

3. Number of Days of Payables:
- Hilton Grand Vacations Inc's payables period has also varied significantly, ranging from 68.98 days in 2019 to 270.93 days in 2023.
- A longer payable period can indicate that the company is taking longer to pay its suppliers, which may improve cash flow but could strain supplier relationships.
- Conversely, a shorter payables period could indicate a more aggressive payment strategy to take advantage of discounts or maintain supplier relationships.

In summary, Hilton Grand Vacations Inc should focus on optimizing its inventory management to reduce DOH, improving receivable collection to lower DSO, and carefully managing payables to maintain relationships with suppliers while optimizing cash flow.

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Long-term

The fixed asset turnover ratio measures the efficiency of a company in generating sales from its fixed assets. For Hilton Grand Vacations Inc, we observe a generally increasing trend in the fixed asset turnover ratio over the past five years, indicating that the company has become more efficient in utilizing its fixed assets to generate revenue. This improvement suggests that Hilton Grand Vacations Inc has better managed its investments in fixed assets, resulting in a higher turnover rate.

On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from all its assets, including both fixed and current assets. However, the total asset turnover ratio for Hilton Grand Vacations Inc has fluctuated over the same period, with a notable decrease in 2021 compared to the previous years. This could imply a less efficient utilization of all assets in generating sales during that specific year.

Overall, while the fixed asset turnover ratio of Hilton Grand Vacations Inc portrays a positive trend of increasing efficiency in utilizing fixed assets, the total asset turnover ratio suggests a need for further evaluation of the company's overall asset management strategies to improve sales generation from all assets.