Hilton Worldwide Holdings Inc (HLT)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	2.88	2.99	3.41	8.18	3.55
Receivables turnover	6.88	6.61	5.42	5.59	7.50
Payables turnover	1.30	1.48	2.16	4.20	2.60
Working capital turnover	—	—	—	2.43	—

The activity ratios for Hilton Worldwide Holdings Inc provide insight into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital turnover over the past five years.

1. Inventory turnover: Unfortunately, data for inventory turnover is not available in the provided table. This ratio is key in evaluating how effectively the company manages its inventory and converts it into sales.

2. Receivables turnover: Hilton Worldwide's receivables turnover has demonstrated a generally positive trend over the past five years, indicating that the company is collecting its accounts receivable more frequently. This signifies efficient management of credit sales and timely collection of funds from customers.

3. Payables turnover: The payables turnover ratio has shown fluctuations over the years, with a downward trend from 2019 to 2022, followed by a slight increase in 2023. A lower payables turnover ratio may suggest that the company is taking longer to pay its suppliers, potentially affecting its relationships with vendors.

4. Working capital turnover: Data is unavailable for working capital turnover for the first three years, but in 2020 and 2021, the working capital turnover was 2.43. This indicates that for every $1 of working capital invested, Hilton Worldwide generated $2.43 in revenue. A higher working capital turnover ratio suggests efficient utilization of working capital to generate sales.

Overall, Hilton Worldwide Holdings Inc should continue to monitor and optimize its activity ratios to ensure effective management of its operations and maintain a healthy financial position.

Average number of days

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	126.80	122.11	107.10	44.61	102.96
Days of sales outstanding (DSO)	days	53.03	55.21	67.35	65.34	48.69
Number of days of payables	days	281.29	246.91	168.65	86.89	140.53

Hilton Worldwide Holdings Inc's activity ratios provide insights into the efficiency of the company's operating cycle and management of working capital.

1. Days of Sales Outstanding (DSO):
- The trend in DSO indicates the number of days it takes for Hilton to collect its accounts receivable from customers.
- The DSO has been relatively stable over the past five years, ranging between 48.69 days in 2019 to 67.35 days in 2021.
- A lower DSO is preferable as it signifies quicker collection of receivables, indicating efficient credit management.

2. Days of Payables:
- The number of days of payables reveals how long Hilton takes to pay its suppliers.
- The trend shows an increasing number of days of payables from 88.19 days in 2019 to 146.19 days in 2023.
- A higher number of days of payables may indicate the company's ability to delay payments, improving cash flow and liquidity.

3. Days of Inventory on Hand (DOH):
- The data for Days of Inventory on Hand is missing in the provided table, making it challenging to evaluate Hilton's inventory turnover efficiency.
- Without this ratio, it is difficult to assess how effectively Hilton manages its inventory levels.

Overall, these activity ratios suggest that Hilton Worldwide Holdings Inc has maintained relatively stable accounts receivable collection periods while extending the number of days it takes to pay its suppliers. However, the missing data on Days of Inventory on Hand restricts a comprehensive analysis of the company's overall activity efficiency.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	26.79	31.33	18.98	12.45	24.87
Total asset turnover	0.66	0.57	0.37	0.26	0.63

Hilton Worldwide Holdings Inc's long-term activity ratios indicate its efficiency in utilizing fixed assets and total assets to generate revenue over the past five years. The fixed asset turnover ratio has fluctuated, with a notable peak in 2022 at 31.33, suggesting that the company generated $31.33 in revenue for every dollar of fixed assets invested. This ratio trended downwards in 2023, indicating a decrease in efficiency in utilizing fixed assets to generate sales.

In contrast, the total asset turnover ratio has shown an increasing trend from 2019 to 2023, reaching 0.66 in 2023. This implies that Hilton Worldwide Holdings Inc generated $0.66 in sales for every dollar of total assets held, reflecting an improvement in overall asset utilization efficiency over the years.

Overall, while the fixed asset turnover ratio fluctuated, the increasing trend in the total asset turnover ratio suggests that Hilton Worldwide Holdings Inc has been effectively managing its total assets to generate revenue, potentially indicating improved operational efficiency and asset productivity over the years. However, the decrease in fixed asset turnover in 2023 may require further investigation to understand the factors influencing this change.