Hilton Worldwide Holdings Inc (HLT)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	—	2.88	2.99	3.41	8.18
Receivables turnover	7.06	6.88	6.61	5.42	5.59
Payables turnover	1.37	1.30	1.48	2.16	4.20
Working capital turnover	—	—	—	—	2.43

Hilton Worldwide Holdings Inc's activity ratios provide insights into how efficiently the company is managing its assets and liabilities.

1. Inventory Turnover: The inventory turnover ratio measures how effectively the company is managing its inventory. A higher turnover ratio indicates that Hilton is selling its inventory more frequently. Over the years, the inventory turnover has decreased from 8.18 in 2020 to 2.88 in 2023, with no data available for 2024. This declining trend may suggest that Hilton is facing challenges in selling its inventory efficiently.

2. Receivables Turnover: The receivables turnover ratio evaluates how quickly Hilton collects payments from its customers. A higher turnover ratio signifies that Hilton is collecting payments at a faster rate. The receivables turnover has increased steadily from 5.59 in 2020 to 7.06 in 2024. This improvement indicates that Hilton is managing its receivables effectively and collecting payments more efficiently over the years.

3. Payables Turnover: The payables turnover ratio assesses how quickly Hilton is paying its suppliers. A lower turnover indicates that the company is taking longer to pay its bills. The payables turnover has declined from 4.20 in 2020 to 1.37 in 2024, implying that Hilton is taking more time to settle its payables. This may have implications for Hilton's relationships with its suppliers.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently Hilton is utilizing its working capital to generate sales. A higher ratio indicates that Hilton is generating more sales with each dollar of working capital. However, there is no data available for 2021 onwards, suggesting a lack of information on Hilton's working capital turnover in recent years.

In summary, the analysis of Hilton Worldwide Holdings Inc's activity ratios highlights areas where the company may need to focus on improving efficiency, particularly in managing inventory and payables. The increasing trend in receivables turnover suggests positive cash flow management practices. Further information on working capital turnover would be beneficial to assess Hilton's overall efficiency in utilizing its working capital.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	126.80	122.11	107.10	44.61
Days of sales outstanding (DSO)	days	51.71	53.03	55.21	67.35	65.34
Number of days of payables	days	266.11	281.29	246.91	168.65	86.89

Hilton Worldwide Holdings Inc's activity ratios indicate changes in efficiency and effectiveness of its operations over the years.

1. Days of Inventory on Hand (DOH):
- In 2020, Hilton held inventory for an average of 44.61 days, which increased significantly to 126.80 days by 2023 before data availability ceased in 2024.
- This suggests a slowdown in the turnover of inventory, potentially signaling issues with excess stock or slowing sales.

2. Days of Sales Outstanding (DSO):
- DSO measures how long it takes for Hilton to collect payment after a sale.
- Hilton's DSO decreased from 65.34 days in 2020 to 51.71 days in 2024, indicating an improvement in the collection of receivables over time.

3. Number of Days of Payables:
- The days of payables for Hilton increased significantly from 86.89 days in 2020 to 266.11 days in 2024.
- This suggests that Hilton is taking longer to pay its suppliers, which might indicate liquidity challenges or renegotiation of payment terms.

Overall, these activity ratios show fluctuations in Hilton's operational efficiency and management of working capital over the years, impacting the company's cash flow and financial health.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	27.19	26.79	31.33	18.98	12.45
Total asset turnover	0.68	0.66	0.57	0.37	0.26

Based on the data provided for Hilton Worldwide Holdings Inc, the fixed asset turnover ratio has shown a consistent upward trend over the years, increasing from 12.45 in 2020 to 27.19 in 2024. This indicates that the company is generating more revenue relative to its fixed assets, reflecting an improvement in efficiency in utilizing its long-term assets.

In terms of total asset turnover, the ratio has also demonstrated an increasing trend from 0.26 in 2020 to 0.68 in 2024. This suggests that Hilton Worldwide Holdings Inc is generating sales more efficiently relative to its total assets, which is a positive indication of the company's ability to utilize its assets effectively to generate revenue.

Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios signifies that Hilton Worldwide Holdings Inc has been improving its operational efficiency and effectively utilizing its assets to generate revenue over the years, which could potentially lead to improved profitability and sustainability in the long term.