Hilton Worldwide Holdings Inc (HLT)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,348,000 | 2,146,000 | 2,147,000 | 960,000 | -490,000 |
| Interest expense | US$ in thousands | 569,000 | 464,000 | 415,000 | 397,000 | 429,000 |
| Interest coverage | 4.13 | 4.62 | 5.17 | 2.42 | -1.14 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,348,000K ÷ $569,000K
= 4.13
The interest coverage ratio for Hilton Worldwide Holdings Inc has shown significant improvement over the years, indicating the company's ability to meet its interest obligations. The ratio was negative in 2020, implying that the company's operating income was insufficient to cover its interest expenses.
However, the trend reversed in the following years with the interest coverage ratio increasing to 2.42 in 2021, and then demonstrating steady growth to 5.17 in 2022, 4.62 in 2023, and 4.13 in 2024. This positive trend suggests that Hilton's operating income has increased sufficiently to cover its interest expenses multiple times, reflecting improved financial health and reduced financial risk.
Overall, the trend in Hilton Worldwide Holdings Inc's interest coverage ratio indicates a positive trajectory, demonstrating the company's ability to comfortably meet its interest payments as its operating performance has strengthened over the years.
Peer comparison
Dec 31, 2024