Hilton Worldwide Holdings Inc (HLT)

Short-term

Turnover ratios

Inventory Turnover Ratio:
- The inventory turnover ratio measures how efficiently Hilton Worldwide Holdings Inc is selling its inventory.
- Hilton's inventory turnover has fluctuated over the past few years, ranging from a high of 8.18 in December 2020 to a low of 2.29 in March 2023.
- A decreasing trend in inventory turnover may indicate slower sales or excessive inventory levels, which could lead to higher storage costs or obsolescence.

Receivables Turnover Ratio:
- The receivables turnover ratio shows how well Hilton is collecting on its credit sales.
- Hilton's receivables turnover has been relatively stable, with slight variations from 4.07 in March 2021 to 7.16 in March 2024.
- A high receivables turnover ratio suggests that Hilton is efficient in collecting payments from customers, while a low ratio could indicate credit management issues.

Payables Turnover Ratio:
- The payables turnover ratio measures how quickly Hilton pays its suppliers.
- Hilton's payables turnover has shown an increasing trend, from 1.48 in December 2022 to 1.37 in December 2024.
- A higher payables turnover ratio may indicate that Hilton is managing its payables effectively, potentially improving cash flow and relationships with suppliers.

Working Capital Turnover Ratio:
- The working capital turnover ratio measures how efficiently Hilton is utilizing its working capital to generate sales.
- Hilton's working capital turnover has varied significantly, from 9.88 in March 2020 to 67.68 in September 2021.
- A higher ratio indicates that Hilton is effectively using its working capital to generate revenue, while a lower ratio may suggest inefficiencies in working capital management.

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Average number of days

Based on the provided data, we can analyze the activity ratios of Hilton Worldwide Holdings Inc over time.

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand represent the number of days it takes for the company to sell its inventory. A lower DOH indicates a faster turnover of inventory, which is generally more favorable.
- Hilton's DOH has fluctuated over the periods provided, with a notable increase from March 31, 2022, to March 31, 2023. This may suggest inventory management challenges or changes in the company's operations during this period.
- The DOH spiked significantly to 1,958.71 days on September 30, 2024, which could indicate a data error or a unique situation impacting inventory management that requires further investigation.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding metric shows the average number of days it takes for the company to collect payments from its customers. A lower DSO value implies a more efficient collection process.
- Hilton's DSO fluctuated throughout the periods provided, with some variability but generally within a reasonable range.
- The trend indicates an improvement in DSO from March 31, 2021, to March 31, 2024, which suggests better accounts receivable management, except for a slight increase on September 30, 2024.

3. Number of Days of Payables:
- The number of days of payables measures the average number of days it takes for the company to pay its suppliers and vendors. A higher number of days indicates relatively slower payment to suppliers.
- Hilton's data shows an increase in the number of days of payables from December 31, 2020, to December 31, 2024, which could imply a shift towards longer payment terms with suppliers.
- The significant rise in days of payables on December 31, 2023, to 281.29 days and then a decrease to 266.11 days on December 31, 2024, may indicate changes in the company's working capital management or supplier relationships during this period.

Overall, further investigation into the unusual spikes in some ratios and their potential implications for Hilton Worldwide Holdings Inc's operations and financial health would be recommended to gain a deeper understanding of the company's performance and efficiency in managing its working capital.

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See also:

Hilton Worldwide Holdings Inc Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

The fixed asset turnover ratio for Hilton Worldwide Holdings Inc has shown a decreasing trend over the past few years, starting at 25.79 in March 2020 and reaching a low of 9.92 in March 2021 before gradually increasing to 28.40 in September 2024. This indicates that the company's efficiency in generating sales from its fixed assets initially decreased and then began to improve.

In comparison, the total asset turnover ratio has also exhibited fluctuations but with an overall increasing trend. The ratio started at 0.58 in March 2020, dropped to 0.20 in March 2021, and then steadily rose to 0.67 by December 2024. This suggests that the company's ability to generate sales from all its assets has strengthened over the years.

When interpreting these long-term activity ratios, it is important to consider the nature of Hilton Worldwide Holdings Inc's business and its asset base. Further analysis and comparison with industry benchmarks would provide a more comprehensive understanding of the company's asset management efficiency.

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See also:

Hilton Worldwide Holdings Inc Long-term (Investment) Activity Ratios (Quarterly Data)