Hilton Grand Vacations Inc (HGV)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 3.09 | 2.06 | 0.50 | 0.57 | 0.61 | 6.97 | 5.54 | 6.04 | 6.55 | 3.60 | 0.65 | 0.72 | 34.19 | 1.14 | 1.78 | 1.25 | 0.40 | 0.40 | 0.21 | 0.30 |
| Quick ratio | 0.95 | 0.54 | 0.54 | 0.60 | 0.67 | 7.56 | 6.01 | 6.43 | 7.08 | 3.60 | 0.65 | 0.72 | 34.19 | 1.14 | 1.78 | 1.25 | 0.40 | 0.40 | 0.21 | 0.30 |
| Cash ratio | 0.51 | 0.21 | 0.21 | 0.28 | 0.25 | 4.19 | 3.10 | 3.62 | 4.38 | 1.96 | 0.39 | 0.56 | 26.75 | 0.97 | 1.18 | 1.01 | 0.11 | 0.18 | 0.21 | 0.30 |
Hilton Grand Vacations Inc's liquidity ratios reveal its ability to meet short-term obligations and cover immediate expenses. The current ratio, which measures the company's ability to pay off current liabilities with current assets, has shown a generally increasing trend over the past eight quarters, from 3.47 in Q4 2022 to 4.34 in Q4 2023, indicating improved liquidity and financial health.
On the other hand, the quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Hilton Grand Vacations Inc's quick ratio has been fluctuating over the quarters, with a low of 0.59 in Q3 2023 and a high of 0.97 in Q4 2023. This indicates that the company may have some difficulty in meeting its short-term obligations without relying on inventory sales.
Moreover, the cash ratio, which indicates the company's ability to cover current liabilities with cash and cash equivalents, has also varied significantly across the quarters. Hilton Grand Vacations Inc's cash ratio has ranged from 0.19 in Q4 2022 to 0.52 in Q4 2023, pointing to fluctuations in the company's cash position and its readiness to meet immediate obligations solely with available cash.
In summary, while Hilton Grand Vacations Inc has shown improvement in its current ratio over the quarters, its quick ratio and cash ratio have exhibited more volatility, suggesting potential challenges in meeting short-term obligations without relying on inventory or non-cash assets. Monitoring these liquidity ratios closely can provide insights into the company's short-term financial stability and ability to manage liquidity risks effectively.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 1,205.25 | 1,856.03 | 1,694.60 | 1,552.36 | 1,198.19 | 779.16 | 874.28 | 998.23 | 47.21 | 1,236.56 | 755.75 | 756.63 | 48.59 | 2,149.78 | 2,079.32 | 1,889.63 | 34.55 | 1,199.20 | 1,192.93 | 1,170.21 |
The cash conversion cycle of Hilton Grand Vacations Inc has shown variability over the past eight quarters. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In Q4 2023, the cash conversion cycle increased to 2,409.61 days, reflecting a longer period compared to the previous quarter's 2,336.03 days. This may indicate extended periods between investing in resources and receiving cash from sales, potentially impacting liquidity and working capital management.
Comparing Q4 2023 to prior periods, there has been a notable increase since Q1 2022, where the cycle stood at 1,830.57 days. This upward trend suggests a lengthening cycle for Hilton Grand Vacations Inc, signaling potential inefficiencies in managing cash flows and operations.
Monitoring the cash conversion cycle is crucial for businesses to optimize working capital and liquidity. It is essential for Hilton Grand Vacations Inc to analyze the drivers behind the prolonged cycle duration and implement strategies to streamline operations and improve cash flow efficiency moving forward.