Hilton Grand Vacations Inc (HGV)
Liquidity 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 15.35 | 3.11 | 3.02 | 3.14 | 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 |
| Quick ratio | 2.55 | 0.55 | 0.65 | 0.68 | 0.99 | 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 |
| Cash ratio | 1.30 | 0.23 | 0.27 | 0.30 | 0.55 | 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 |
Based on the provided data, let's analyze the liquidity ratios of Hilton Grand Vacations Inc:
1. Current Ratio:
- The current ratio measures the company's ability to meet short-term obligations with its short-term assets. A ratio greater than 1 indicates the company has more current assets than current liabilities.
- Hilton Grand Vacations Inc's current ratio fluctuated over the years, ranging from as low as 0.50 (June 30, 2023) to as high as 34.19 (December 31, 2020).
- The current ratio improved significantly from the low of 0.50 to 3.11 by September 30, 2024, indicating the company strengthened its ability to cover short-term liabilities using current assets.
- However, the current ratio dropped to 15.35 by December 31, 2024, which might suggest changes in the company's liquidity position.
2. Quick Ratio:
- The quick ratio is a more stringent measure of liquidity that excludes inventory from current assets.
- Hilton Grand Vacations Inc's quick ratio followed a similar trend to the current ratio, fluctuating over time.
- The company's quick ratio improved from 0.54 on June 30, 2023, to 2.55 on December 31, 2024, indicating an enhanced ability to meet short-term obligations without relying on inventory.
3. Cash Ratio:
- The cash ratio is the most conservative measure of liquidity, only considering cash and cash equivalents to cover current liabilities.
- Hilton Grand Vacations Inc's cash ratio showed fluctuations, with values ranging from 0.21 to 26.75.
- The company maintained a healthy cash ratio throughout the years, increasing from 0.21 on June 30, 2023, to 1.30 on December 31, 2024, indicating a strong ability to cover short-term obligations with cash on hand.
In conclusion, Hilton Grand Vacations Inc's liquidity ratios displayed varying levels of liquidity over the years, with fluctuations in the current, quick, and cash ratios. The company showed improvements in liquidity ratios from low points but experienced some fluctuations, which may require further analysis to understand the company's liquidity management strategies and financial health.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 1,020.72 | 1,552.70 | 1,402.43 | 1,386.56 | 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 |
The cash conversion cycle for Hilton Grand Vacations Inc has shown fluctuations over the period under review. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flow from sales.
From March 31, 2020, to September 30, 2022, Hilton Grand Vacations Inc experienced a prolonged cash conversion cycle, peaking at 2,149.78 days in September 30, 2020. This indicates that the company was holding onto inventory and receivables for an extended period before converting them into cash.
Subsequently, there was a significant improvement in the cash conversion cycle, with a sharp decline to 47.21 days by December 31, 2021. This suggests a more efficient management of inventory and receivables, leading to a quicker cash conversion process.
However, the cash conversion cycle started to increase again from March 31, 2022, reaching 1,856.03 days by September 30, 2023, before slightly decreasing to 1,020.72 days by December 31, 2024. These fluctuations indicate that Hilton Grand Vacations Inc may have faced challenges in managing its working capital efficiently during this period.
Overall, it is essential for Hilton Grand Vacations Inc to closely monitor and manage its cash conversion cycle to ensure optimal working capital management, efficiency in operations, and sustainable cash flows.