Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2013
- Operating Profit Margin since 2013
- Price to Book Value (P/BV) since 2013
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Solvency Ratios (Summary)
Hilton Worldwide Holdings Inc., solvency ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Debt to Capital Ratio
- The debt to capital ratio demonstrates a fluctuating but generally increasing trend over the five-year period. Starting at 1.06 in 2019, it rose to 1.17 in 2020, slightly declined to 1.10 in 2021, and then increased again to reach 1.35 by 2023. When adjusting for operating lease liabilities, the trend is similar, with values ranging from 1.06 in 2019 up to 1.30 in 2023. This indicates a gradual increase in the proportion of debt relative to capital within the company's financial structure.
- Debt to Assets Ratio
- The debt to assets ratio also shows a rising pattern, starting at 0.53 in 2019 and increasing to 0.60 in 2023. When including operating lease liabilities, the ratio is higher throughout the years, beginning at 0.61 in 2019 and reaching 0.66 in 2023. This suggests that the company's overall leverage relative to its assets is increasing, with operating lease liabilities constituting a significant portion of total debt obligations.
- Interest Coverage Ratio
- The interest coverage ratio exhibits notable volatility. In 2019, it was at a relatively healthy level of 4. However, it sharply dropped to a negative value of -1.15 in 2020, indicating an inability to cover interest expenses during that year. Thereafter, the ratio recovered, rising to 2.41 in 2021, further improving to 5.18 in 2022, and slightly decreasing to 4.65 in 2023. This pattern reflects a significant financial stress in 2020, followed by a strong recovery in the following years.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio follows a similar pattern to the interest coverage ratio. It declined from 3.23 in 2019 to -0.66 in 2020, indicating difficulties in covering fixed charges during that period. Subsequently, the ratio improved to 2.07 in 2021, rose to 4.28 in 2022, and slightly fell to 3.91 in 2023. This trajectory highlights a temporary weakening in the company’s ability to meet fixed financial obligations in 2020 with improvement thereafter.
- Overall Observations
- The company experienced increased leverage over the analyzed period as evidenced by rising debt to capital and debt to assets ratios. The peak financial strain occurred in 2020, demonstrated by negative interest and fixed charge coverage ratios, which indicate challenges in covering interest and fixed costs during that year. Recovery began in 2021 with improvements in coverage ratios, sustained through to 2023, though coverage ratios did not fully return to their 2019 levels. The inclusion of operating lease liabilities consistently elevates leverage metrics, underscoring the importance of considering these obligations in assessing financial stability.
Debt Ratios
Coverage Ratios
Debt to Equity
Hilton Worldwide Holdings Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Total Hilton stockholders’ deficit | ||||||
| Solvency Ratio | ||||||
| Debt to equity1 | ||||||
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Debt to Equity, Sector | ||||||
| Consumer Services | ||||||
| Debt to Equity, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity = Total debt ÷ Total Hilton stockholders’ deficit
= ÷ =
2 Click competitor name to see calculations.
- Total debt
-
The total debt exhibited an increasing trend from 2019 to 2020, rising from approximately $7.993 billion to $10.487 billion. This significant increase corresponds with the onset of the pandemic period, which likely necessitated increased borrowing or liquidity management. Subsequently, the total debt decreased to $8.766 billion in 2021 and remained relatively stable in 2022 at $8.747 billion. In 2023, a modest increase to $9.196 billion was observed, suggesting a cautious approach to leverage during recovery phases.
- Total Hilton stockholders’ deficit
-
The stockholders’ deficit displayed considerable volatility over the analyzed period. Starting with a deficit of $482 million in 2019, the figure widened sharply to $1.490 billion in 2020, indicating a significant deterioration in equity, potentially due to pandemic-related losses or impairments. In 2021, the deficit improved to $821 million, suggesting some recovery or recapitalization efforts, though it increased again to $1.102 billion in 2022. By 2023, the deficit further expanded to its highest level of $2.360 billion, signaling persistent challenges in reestablishing positive equity or profitability.
- Debt to equity ratio
-
No explicit debt to equity ratio values were reported. However, by examining the negative equity values alongside total debt, it is apparent that the company operated with a significant stockholders’ deficit throughout the period, complicating traditional debt-to-equity measurements. The presence of a persistent and growing deficit implies that the debt to equity ratio, if computable, would be negative or nonsensical, highlighting financial distress or capital structure imbalances during these years.
Debt to Equity (including Operating Lease Liability)
Hilton Worldwide Holdings Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Operating lease liabilities, current | ||||||
| Operating lease liabilities, non-current | ||||||
| Total debt (including operating lease liability) | ||||||
| Total Hilton stockholders’ deficit | ||||||
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Consumer Services | ||||||
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Hilton stockholders’ deficit
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several important trends regarding the company's debt structure and equity position over the period from December 31, 2019 to December 31, 2023.
- Total Debt (including operating lease liability)
- The total debt increased significantly from 2019, starting at $9,163 million, peaking in 2020 at $11,628 million. It then declined in 2021 and 2022 to $9,776 million and $9,691 million respectively, before rising again to $10,120 million in 2023. This pattern suggests an initial increase possibly related to strategic financing or external factors such as the impact of the global environment in 2020, followed by partial deleveraging and a slight increase again in the most recent year.
- Total Hilton Stockholders’ Deficit
- The stockholders’ deficit worsened substantially over the period. Starting with a deficit of $482 million in 2019, it expanded dramatically to $1,490 million in 2020, indicating a sharp reduction in equity probably reflecting losses or write-downs. Although it improved to some extent in 2021, decreasing to a deficit of $821 million, it again deteriorated to $1,102 million in 2022 and further to $2,360 million in 2023. This escalating deficit highlights continuing challenges in maintaining a positive equity balance.
- Debt to Equity (including operating lease liability)
- The ratio data is missing, which prevents direct assessment of leverage ratios. However, given the large and growing stockholders' deficit alongside sizable total debt, it is likely that the debt-to-equity ratio is high and possibly increasing, indicating growing financial leverage and potential solvency concerns.
Overall, the data indicates that the company adopted a strategy of increased debt financing with fluctuating but generally high levels of total debt. Meanwhile, the persistent and widening stockholders' deficit suggests ongoing financial challenges impacting the equity base. The absence of the debt-to-equity ratio limits precise leverage analysis, but the trends point to increasing leverage and potentially heightened financial risk.
Debt to Capital
Hilton Worldwide Holdings Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Total Hilton stockholders’ deficit | ||||||
| Total capital | ||||||
| Solvency Ratio | ||||||
| Debt to capital1 | ||||||
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Debt to Capital, Sector | ||||||
| Consumer Services | ||||||
| Debt to Capital, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total debt
- The total debt increased significantly from 7,993 million USD in 2019 to a peak of 10,487 million USD in 2020. Following this peak, the debt decreased to 8,766 million USD in 2021 and remained relatively stable around 8,747 million USD in 2022. In 2023, there was a slight increase again to 9,196 million USD.
- Total capital
- Total capital followed a downward trend over the period analyzed. It started at 7,511 million USD in 2019 and increased to 8,997 million USD in 2020. However, from 2020 onward, it declined steadily each year, reaching 6,836 million USD by 2023. This represents an overall decrease in capital base since 2020.
- Debt to capital ratio
- The debt to capital ratio remained above 1.0 throughout the period, indicating that total debt has consistently exceeded total capital. The ratio rose from 1.06 in 2019 to its highest point of 1.17 in 2020, reflecting an increased reliance on debt financing relative to capital. Although the ratio slightly declined to 1.10 in 2021, it increased again to 1.14 in 2022 and further to 1.35 in 2023. This indicates an increasing leverage trend and greater financial risk over time.
Debt to Capital (including Operating Lease Liability)
Hilton Worldwide Holdings Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Operating lease liabilities, current | ||||||
| Operating lease liabilities, non-current | ||||||
| Total debt (including operating lease liability) | ||||||
| Total Hilton stockholders’ deficit | ||||||
| Total capital (including operating lease liability) | ||||||
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Consumer Services | ||||||
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals notable trends in the company's debt levels, capital structure, and leverage ratios over the five-year period from 2019 to 2023.
- Total Debt (including operating lease liability)
- The total debt increased significantly from US$9,163 million in 2019 to a peak of US$11,628 million in 2020. This sharp rise likely reflects elevated borrowing, possibly related to external challenges or strategic liquidity management during that year. Following 2020, total debt decreased to US$9,776 million in 2021 and remained relatively stable in 2022 at US$9,691 million. However, a modest increase was observed again in 2023, bringing total debt to US$10,120 million.
- Total Capital (including operating lease liability)
- Total capital exhibited a declining trend over the period. Starting at US$8,681 million in 2019, it rose slightly to US$10,138 million in 2020, consistent with the increase in debt. From 2020 onwards, total capital showed a consistent decline each year: US$8,955 million in 2021, US$8,589 million in 2022, and down to US$7,760 million in 2023. This reduction suggests either a decrease in equity, capital reductions, or other adjustments impacting the capital base.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio fluctuated but generally indicated an increase in leverage over the period. It rose from 1.06 in 2019 to 1.15 in 2020, reflecting the debt surge outpacing capital growth. In 2021, the ratio decreased slightly to 1.09, possibly due to a partial reduction in debt or capital increase. However, the ratio increased again in 2022 to 1.13, followed by a more pronounced rise to 1.30 in 2023, indicating a significant increase in leverage. This trend signals that debt levels have grown relative to capital, which could imply higher financial risk or a strategic choice to utilize more debt financing.
Debt to Assets
Hilton Worldwide Holdings Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets1 | ||||||
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Debt to Assets, Sector | ||||||
| Consumer Services | ||||||
| Debt to Assets, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The annual financial data reveals several notable trends regarding the company's debt and assets over the five-year period ending December 31, 2023.
- Total debt
- The total debt exhibited an overall upward trend from 2019 to 2023. It increased sharply from 7,993 million USD in 2019 to a peak of 10,487 million USD in 2020. Subsequently, it declined to 8,766 million USD in 2021 and remained relatively stable around 8,700 million USD in 2022 before rising again moderately to 9,196 million USD in 2023.
- Total assets
- Total assets experienced some fluctuations without a clear upward or downward trajectory. The figure rose from 14,957 million USD in 2019 to a high of 16,755 million USD in 2020. Thereafter, assets declined steadily over the following three years to 15,441 million USD in 2021, 15,512 million USD in 2022, and further down to 15,401 million USD in 2023.
- Debt to assets ratio
- The debt to assets ratio amplified from 0.53 in 2019 to 0.63 in 2020, coinciding with the increase in total debt and assets during that year. Following this peak, the ratio decreased to 0.57 in 2021 and 0.56 in 2022, reflecting the reduction in total debt and relative stabilization of assets. However, the ratio increased again to 0.60 in 2023, indicating a rise in leverage relative to the asset base.
Overall, the data suggests a period of increased leverage in 2020, followed by a phase of debt reduction and asset stabilization through 2021 and 2022. In 2023, leverage increased moderately again. The fluctuations in total debt appear more pronounced than changes in total assets, highlighting shifts in financing strategy or operational needs impacting the capital structure.
Debt to Assets (including Operating Lease Liability)
Hilton Worldwide Holdings Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | ||||||
| Long-term debt, excluding current maturities | ||||||
| Total debt | ||||||
| Operating lease liabilities, current | ||||||
| Operating lease liabilities, non-current | ||||||
| Total debt (including operating lease liability) | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Consumer Services | ||||||
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt increased significantly from 2019 to 2020, rising from 9,163 million USD to 11,628 million USD. After this peak in 2020, total debt decreased in 2021 and 2022 to 9,776 million USD and 9,691 million USD respectively, before slightly rising again to 10,120 million USD in 2023. Overall, the debt level shows a spike in 2020 followed by a moderate decline and stabilization around the 10,000 million USD mark in subsequent years.
- Total Assets
- Total assets rose from 14,957 million USD in 2019 to a peak of 16,755 million USD in 2020. This was followed by a decrease over the next three years, with assets declining to 15,441 million USD in 2021, marginally increasing to 15,512 million USD in 2022, and slightly dropping again to 15,401 million USD in 2023. This shows a peak in assets coinciding with the highest debt level and a stabilization at a lower asset base afterward.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio experienced a noticeable increase from 0.61 in 2019 to 0.69 in 2020, reflecting higher leverage possibly due to increased borrowing or reduced asset base efficiency during that period. Subsequently, the ratio decreased to 0.63 in 2021 and further to 0.62 in 2022, indicating a reduction in leverage relative to asset size. However, in 2023, the ratio increased again to 0.66, suggesting a slight rise in leverage after two years of decline.
- Overall Insights
- The data reveals a significant impact during 2020, characterized by peak total debt and asset levels, alongside the highest leverage ratio within the observed period. Following 2020, there is a trend toward reducing debt and improving leverage ratios until 2022. The slight increase in debt and leverage ratio in 2023 may indicate a shift toward increased borrowing or adjustments in asset management. The asset base shows some volatility but remains relatively stable after the initial fluctuations in 2020. These patterns suggest responsiveness to external circumstances in 2020, followed by efforts to balance debt and asset levels in ensuing years.
Financial Leverage
Hilton Worldwide Holdings Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | ||||||
| Total Hilton stockholders’ deficit | ||||||
| Solvency Ratio | ||||||
| Financial leverage1 | ||||||
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Financial Leverage, Sector | ||||||
| Consumer Services | ||||||
| Financial Leverage, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Financial leverage = Total assets ÷ Total Hilton stockholders’ deficit
= ÷ =
2 Click competitor name to see calculations.
- Total Assets
- The total assets showed a general increase from 2019 to 2020, rising from 14,957 million USD to 16,755 million USD. However, there was a decline in 2021 to 15,441 million USD, followed by a relatively stable pattern through 2022 and 2023 with values close to 15,512 million USD and 15,401 million USD, respectively. Overall, the asset base expanded initially but then decreased and stabilized just above the 2019 level.
- Total Hilton Stockholders’ Deficit
- The stockholders' deficit exhibited significant volatility over the five-year period. In 2019, the deficit stood at -482 million USD, which sharply increased to -1,490 million USD in 2020. The deficit partially improved in 2021 to -821 million USD but worsened again in 2022 to -1,102 million USD. By 2023, the stockholders’ deficit had further enlarged substantially to -2,360 million USD. This indicates a deteriorating equity position with considerable fluctuations and a notable worsening in the most recent year.
- Financial Leverage
- No data were provided for financial leverage, thus trends or insights cannot be drawn for this ratio.
Interest Coverage
Hilton Worldwide Holdings Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Hilton stockholders | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Solvency Ratio | ||||||
| Interest coverage1 | ||||||
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Interest Coverage, Sector | ||||||
| Consumer Services | ||||||
| Interest Coverage, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
- Earnings Before Interest and Tax (EBIT)
- The EBIT experienced significant volatility over the five-year period. Initially, there was a positive EBIT of 1,658 million USD in 2019. However, in 2020, the figure dropped sharply to a negative 495 million USD, indicating a substantial operational loss during that year. Following this decline, EBIT recovered in 2021 to 957 million USD and continued to improve significantly in 2022 and 2023, reaching 2,149 million USD and 2,156 million USD respectively. This trend reflects a strong recovery and growth in operating profitability after the downturn in 2020.
- Interest Expense
- Interest expense remained relatively stable, fluctuating modestly between 397 million USD and 464 million USD throughout the analyzed years. It showed a slight upward trend, starting at 414 million USD in 2019, peaking at 464 million USD in 2023. This stability suggests consistent borrowing costs despite the varied EBIT performance.
- Interest Coverage Ratio
- The interest coverage ratio, which measures the ability to cover interest expenses with operational earnings, exhibited pronounced changes. The ratio was robust at 4 in 2019, indicating good coverage. However, it dropped to -1.15 in 2020, reflecting the negative EBIT and consequent operational earnings insufficiency to cover interest expenses. Thereafter, the ratio improved significantly to 2.41 in 2021 and further increased to 5.18 in 2022, denoting enhanced operational profitability and financial health. A slight decline was noted in 2023 to 4.65, though the coverage remained strong.
Fixed Charge Coverage
Hilton Worldwide Holdings Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Hilton stockholders | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Add: Income tax expense | ||||||
| Add: Interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Add: Operating lease expense for fixed payments | ||||||
| Earnings before fixed charges and tax | ||||||
| Interest expense | ||||||
| Operating lease expense for fixed payments | ||||||
| Fixed charges | ||||||
| Solvency Ratio | ||||||
| Fixed charge coverage1 | ||||||
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Fixed Charge Coverage, Sector | ||||||
| Consumer Services | ||||||
| Fixed Charge Coverage, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
2 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax showed a significant decline in 2020, reaching a negative value of -366 million USD, indicating a substantial loss compared to 2019, which reported 1802 million USD. This decline likely reflects adverse conditions or impairments during 2020. However, a recovery trend is observable from 2021 onwards, with earnings rising to 1082 million USD, then further improving to 2262 million USD in 2022 and maintaining a similar level of 2274 million USD in 2023. This suggests a strong rebound and stabilization in the company’s operating earnings after the 2020 downturn.
- Fixed charges
- Fixed charges remained relatively stable over the period, fluctuating slightly between 522 and 582 million USD. The consistent level indicates a steady obligation toward interest and similar fixed expenses without significant increase or decrease, despite fluctuations in operating earnings.
- Fixed charge coverage ratio
- The fixed charge coverage ratio experienced a sharp decline to negative values in 2020, reflecting the negative earnings and inability to cover fixed charges that year. However, the ratio improved substantially in 2021 to 2.07, indicating a recovery in the company's ability to meet its fixed charges from earnings before fixed charges and tax. This positive trend continued into 2022 with a ratio of 4.28, suggesting strong coverage of fixed charges. In 2023, the ratio slightly declined to 3.91 but remained comfortably above 3, indicating continued robust coverage of fixed obligations.