Hilton Worldwide Holdings Inc (HLT)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 0.70 | 0.85 | 0.95 | 1.73 | 0.73 |
| Quick ratio | 0.61 | 0.75 | 0.83 | 1.64 | 0.63 |
| Cash ratio | 0.21 | 0.36 | 0.47 | 1.32 | 0.19 |
The liquidity ratios of Hilton Worldwide Holdings Inc have shown fluctuations over the past five years.
The current ratio has decreased from 1.73 in 2020 to 0.70 in 2023, indicating a decline in the company's ability to cover its short-term obligations with its current assets. A current ratio below 1 suggests potential liquidity concerns as current liabilities may be higher than current assets.
Similarly, the quick ratio has also decreased from 1.71 in 2020 to 0.68 in 2023, reflecting a decline in the company's ability to meet short-term obligations with its most liquid assets. This ratio excludes inventory from current assets, providing a more stringent measure of liquidity.
The cash ratio has also followed a decreasing trend, dropping from 1.39 in 2020 to 0.28 in 2023. This ratio measures the company's ability to pay off its current liabilities solely with its cash and cash equivalents. A ratio below 1 suggests limited ability to cover short-term obligations solely with cash.
Overall, the declining trend in all three liquidity ratios over the past years raises concerns about Hilton Worldwide Holdings Inc's short-term liquidity position. It may indicate difficulties in meeting its current obligations and managing cash flows effectively. Further analysis of the company's liquidity management and working capital practices would be necessary to address these downward trends.
See also:
Hilton Worldwide Holdings Inc Liquidity Ratios
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -101.46 | -69.59 | 5.80 | 23.06 | 11.13 |
The cash conversion cycle of Hilton Worldwide Holdings Inc has shown a fluctuating trend over the past five years. The company's cash conversion cycle reflects the efficiency with which it converts its investments in inventory and other resources into cash flows from sales.
From the data provided, it can be observed that Hilton's cash conversion cycle has decreased significantly from -39.50 days in 2019 to -93.16 days in 2023. A negative cash conversion cycle indicates that Hilton is able to convert its investments into cash before having to pay its suppliers, which is generally a favorable position.
Despite the fluctuations in the cash conversion cycle over the years, Hilton has managed to maintain a negative cycle, indicating that the company is efficient in managing its working capital and generating cash flows from its operations. However, the increasing cycle from 2021 to 2023 could signal potential challenges in managing working capital efficiently or a shift in the company's operations that require further analysis. Overall, Hilton's cash conversion cycle analysis suggests a strong position in terms of liquidity and operational efficiency but warrants continued monitoring and assessment.