Hilton Worldwide Holdings Inc (HLT)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		7.06	6.88	6.61	5.42	5.59
DSO	days	51.71	53.03	55.21	67.35	65.34

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.06
= 51.71

The Days Sales Outstanding (DSO) is a measure of how long, on average, it takes a company to collect payment after making a sale. Analyzing the DSO trend for Hilton Worldwide Holdings Inc over the past five years, we observe a decreasing trend from 65.34 days as of December 31, 2020, to 51.71 days as of December 31, 2024.

A decreasing DSO indicates that the company has been able to collect payments from customers more efficiently over the years. This could be a positive sign of effective credit management and collection processes within the company.

A lower DSO means that Hilton is converting its accounts receivable into cash more quickly, which can improve liquidity and working capital management. It also indicates a healthier cash flow cycle for the company.

However, it's important to note that a very low DSO could also suggest overly aggressive credit terms that may lead to increased risk of bad debts. Hence, a balance between efficient collections and maintaining customer relationships is essential.

Overall, the decreasing trend in DSO for Hilton Worldwide Holdings Inc is a positive indicator of improved cash collection efficiency and effective management of accounts receivable over the analyzed period.