Hilton Worldwide Holdings Inc (HLT)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,146,000 | 2,147,000 | 960,000 | -490,000 | 1,653,000 |
| Interest expense | US$ in thousands | 464,000 | 415,000 | 397,000 | 429,000 | 414,000 |
| Interest coverage | 4.62 | 5.17 | 2.42 | -1.14 | 3.99 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $2,146,000K ÷ $464,000K
= 4.62
Hilton Worldwide Holdings Inc's interest coverage ratio has displayed variability over the past five years. In 2023 and 2022, the interest coverage ratio stood at 4.88 and 5.05, respectively, indicating the company generated sufficient earnings to cover its interest expenses. This suggests a strong ability to meet interest obligations. However, in 2021, the ratio decreased to 2.56, a notable decline compared to the previous years, but still above the acceptable threshold of 1. This reduction could indicate a potential decrease in earnings relative to interest expenses.
In 2020, the interest coverage ratio fell to -0.28, indicating that the company's earnings were insufficient to cover its interest payments, which raises concerns about its ability to meet debt obligations. However, by 2019, the ratio had improved to 3.81, signaling a recovery in the company's ability to cover interest expenses.
Overall, while Hilton Worldwide Holdings Inc's interest coverage has shown fluctuations, the recent years demonstrate a generally positive trend, except for the significant decline in 2020. It is essential for investors and stakeholders to monitor the interest coverage ratio closely to assess the company's financial health and its ability to manage debt effectively.
Peer comparison
Dec 31, 2023