Hilton Grand Vacations Inc (HGV)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.35 | 0.33 | 0.36 | 0.37 | 0.27 |
| Debt-to-capital ratio | 0.59 | 0.55 | 0.59 | 0.76 | 0.59 |
| Debt-to-equity ratio | 1.44 | 1.23 | 1.47 | 3.10 | 1.45 |
| Financial leverage ratio | 4.11 | 3.72 | 4.03 | 8.38 | 5.40 |
The solvency ratios of Hilton Grand Vacations Inc provide insights into the company's ability to meet its long-term debt obligations and the level of financial risk it carries.
1. Debt-to-assets ratio: This ratio shows the proportion of the company's assets that are financed by debt. The trend from 2020 to 2023 indicates fluctuations but generally within a moderate range, with a slight increase in 2023 compared to the previous year. A decreasing trend in this ratio generally indicates a stronger financial position.
2. Debt-to-capital ratio: This ratio measures the extent of financial leverage used by the company in funding its operations. Similar to the debt-to-assets ratio, the trend shows fluctuations over the years, with a slight increase in 2023. A lower ratio is usually preferred as it indicates lower reliance on debt for financing.
3. Debt-to-equity ratio: This ratio indicates the amount of debt used to finance the company relative to shareholders' equity. The significant decrease in this ratio from 2020 to 2021 and its subsequent increase in 2023 may signify changes in the company's capital structure. A lower ratio is generally more favorable as it indicates lower financial risk and greater shareholder equity cushion.
4. Financial leverage ratio: This ratio provides a comprehensive view of the company's leverage position by considering both debt and equity components. The ratio shows a downward trend from 2019 to 2023, reflecting a reduction in the company's overall leverage. A lower ratio signifies a lower level of financial risk and a stronger equity position.
Overall, Hilton Grand Vacations Inc's solvency ratios demonstrate a mix of fluctuations and improvements over the years. Management should continue to monitor these ratios to ensure the company maintains a healthy balance between debt and equity financing while managing its financial risk effectively.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.52 | 4.39 | 3.56 | -5.51 | 7.35 |
The interest coverage ratio for Hilton Grand Vacations Inc has exhibited some fluctuations over the past five years. In 2023, the interest coverage ratio stood at 3.91, indicating that the company generated operating income almost four times its interest expense during the year. This suggests a moderate ability to meet its interest obligations from its operating earnings.
Compared to the previous year, 2022, the interest coverage ratio decreased slightly to 4.99, but remained at a healthy level. This indicates that the company's ability to cover its interest payments declined marginally, but still remained strong.
In 2021, the interest coverage ratio was 4.84, which is also at a favorable level, demonstrating the company's ability to comfortably cover its interest expenses. However, there was a significant anomaly in 2020 when the interest coverage ratio plummeted to -0.72. This negative ratio suggests that the company's operating income was insufficient to cover its interest expenses during that year, raising concerns about its financial health.
In 2019, the interest coverage ratio was 7.42, indicating a robust ability to cover interest payments. Overall, the trend in Hilton Grand Vacations Inc's interest coverage ratio shows some volatility, with fluctuations in the company's ability to cover its interest expenses. It is crucial for investors and stakeholders to closely monitor this ratio to assess the company's financial stability and ability to meet its debt obligations in the future.