Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Balance Sheet: Assets
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Selected Financial Data since 2013
- Debt to Equity since 2013
- Price to Earnings (P/E) since 2013
- Price to Sales (P/S) since 2013
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Short-term Activity Ratios (Summary)
Hilton Worldwide Holdings Inc., short-term (operating) activity 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).
The analysis of the key financial ratios over the five-year period reveals several notable trends concerning liquidity and operational efficiency aspects.
- Receivables Turnover
- The receivables turnover ratio experienced a decline from 7.5 in 2019 to a low of 5.42 in 2021, indicating a slower collection of receivables during this period. However, there is a noticeable recovery in subsequent years, rising to 6.61 in 2022 and 6.88 in 2023. This trend suggests an improvement in the efficiency of collecting outstanding credit amounts after the dip observed in 2020 and 2021.
- Payables Turnover
- The payables turnover ratio showed significant volatility. It started at a high level of 31.19 in 2019 but dropped sharply to 19.23 in 2020. Subsequent years saw a partial rebound to 21.12 in 2021 and 23.84 in 2022, before slightly declining to 22.4 in 2023. This pattern indicates changes in the company's payment practices or supplier credit terms, with a notable reduction in turnover during the earlier pandemic-affected years, followed by some recovery.
- Working Capital Turnover
- Information on working capital turnover is limited, with data only available for 2020 at 2.43. The absence of values for other years restricts analysis of trends over time.
- Average Receivable Collection Period
- The average collection period, measured in days, increased from 49 days in 2019 to 67 days in 2021, mirroring the decline in receivables turnover during the same timeframe. This indicates that the company took longer to collect its receivables during these years. From 2021 onwards, there is an improvement as the period decreases to 55 days in 2022 and further to 53 days in 2023, reflecting enhanced collection efficiency.
- Average Payables Payment Period
- The average payment period rose notably from 12 days in 2019 to 19 days in 2020, suggesting a lengthening of time taken by the company to settle its payables during the pandemic onset. Subsequently, it declined to 17 days in 2021 and 15 days in 2022, slightly increasing again to 16 days in 2023. Overall, payables payment periods remained higher than the 2019 baseline, indicating a sustained, but moderated, extension in payment timing.
Turnover Ratios
Average No. Days
Receivables Turnover
Hilton Worldwide Holdings Inc., receivables turnover 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) | ||||||
| Revenues | ||||||
| Accounts receivable, net of allowance for credit losses | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Receivables Turnover, Sector | ||||||
| Consumer Services | ||||||
| Receivables Turnover, 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
Receivables turnover = Revenues ÷ Accounts receivable, net of allowance for credit losses
= ÷ =
2 Click competitor name to see calculations.
- Revenues
- Revenues demonstrate a significant decline from 2019 to 2020, falling from 9,452 million US dollars to 4,307 million US dollars, which indicates a major contraction in business activity during that period. This downturn was followed by a gradual recovery over the next three years, with revenues rising to 5,788 million in 2021, 8,773 million in 2022, and reaching 10,235 million in 2023. The upward trend post-2020 suggests a strong rebound, surpassing the pre-decline level by the end of 2023.
- Accounts receivable, net of allowance for credit losses
- This financial item decreased from 1,261 million US dollars in 2019 to 771 million in 2020, reflecting the reduced sales volume or tighter credit policies during that year. Subsequently, accounts receivable increased steadily to 1,068 million in 2021, 1,327 million in 2022, and 1,487 million in 2023, mirroring the revenue recovery and possibly indicating expanded credit sales or an increase in outstanding customer balances.
- Receivables turnover
- The receivables turnover ratio fell sharply from 7.5 in 2019 to 5.59 in 2020, signaling a slower collection of receivables during the period of reduced revenue. The ratio continued to decline slightly to 5.42 in 2021 before improving to 6.61 in 2022 and further to 6.88 in 2023. This trajectory suggests that the efficiency in collecting receivables diminished initially but has been recovering in line with increasing revenues, although it has not yet returned to the pre-decline level.
Payables Turnover
Hilton Worldwide Holdings Inc., payables turnover 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) | ||||||
| Revenues | ||||||
| Accounts payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Payables Turnover, Sector | ||||||
| Consumer Services | ||||||
| Payables Turnover, 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
Payables turnover = Revenues ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
The financial data over the five-year period demonstrates clear trends across revenues, accounts payable, and payables turnover for the company.
- Revenues
- Revenues experienced a significant decline from 2019 to 2020, dropping from 9,452 million US dollars to 4,307 million US dollars, indicating a substantial reduction likely linked to external factors impacting business operations. Subsequently, revenues showed a recovery trend, increasing to 5,788 million in 2021, accelerating further to 8,773 million in 2022, and reaching 10,235 million in 2023. This progressive growth suggests a strong rebound and a return towards pre-2019 revenue levels by the end of the period.
- Accounts Payable
- The accounts payable balance decreased from 303 million in 2019 to 224 million in 2020, mirroring the reduction in business activity seen in revenues. From 2020 onward, accounts payable steadily increased, reaching 274 million in 2021, 368 million in 2022, and 457 million in 2023. This upward trend correlates with the recovery in revenues and may indicate increased purchasing activities or extended supplier credit terms as business operations expanded.
- Payables Turnover
- The payables turnover ratio declined sharply from 31.19 in 2019 to 19.23 in 2020, reflecting slower payment cycles or reduced purchasing volumes consistent with the drop in accounts payable and revenues. In the subsequent years, the ratio gradually improved to 21.12 in 2021 and 23.84 in 2022, suggesting a modest acceleration in the payment of suppliers. However, it slightly decreased to 22.4 in 2023, indicating some stabilization in payment patterns. Overall, the payables turnover remained lower than the 2019 level throughout the period, which could imply a strategic adjustment in working capital management or shifts in supplier relationships.
Working Capital Turnover
Hilton Worldwide Holdings Inc., working capital turnover 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 assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Revenues | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Working Capital Turnover, Sector | ||||||
| Consumer Services | ||||||
| Working Capital Turnover, 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
Working capital turnover = Revenues ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital figures exhibit significant volatility over the analyzed periods. In 2019, the company reported a negative working capital of -778 million USD, which shifted positively to 1771 million USD in 2020, indicating improved liquidity. However, this improvement was not sustained, as 2021 saw a return to negative working capital of -148 million USD, followed by further declines in 2022 and 2023 to -502 million USD and -1108 million USD respectively. This downward trend in working capital over the last three years suggests increasing short-term liquidity pressure or changes in current assets and liabilities management.
- Revenues
- Revenues experienced a sharp decline from 9,452 million USD in 2019 to 4,307 million USD in 2020, likely reflecting the impact of adverse market conditions during that period. Subsequently, a recovery is evident as revenues increased to 5,788 million USD in 2021 and further strengthened significantly in 2022 and 2023, reaching 8,773 million USD and 10,235 million USD respectively. This upward trajectory post-2020 indicates a strong rebound in business performance and market demand.
- Working Capital Turnover
- The available data for working capital turnover is limited to 2020, where it stands at 2.43. This suggests that during that year, the company generated 2.43 USD in revenue for every 1 USD of working capital, indicating efficient utilization of working capital. However, the absence of data for other years prevents a comprehensive trend analysis of this ratio.
Average Receivable Collection Period
Hilton Worldwide Holdings Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Consumer Services | ||||||
| Average Receivable Collection Period, 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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio displayed a noticeable decline from 7.5 in 2019 to 5.59 in 2020, indicating a reduced efficiency in collecting receivables during that year. This declining trend continued slightly in 2021 to 5.42. However, an improvement is observed from 2021 onwards, with the ratio increasing to 6.61 in 2022 and further to 6.88 in 2023. This recovery suggests a strengthening in the ability to convert receivables into cash more quickly in the recent years.
- Average Receivable Collection Period
- The average collection period in days shows an inverse trend to the receivables turnover ratio, as to be expected. It increased significantly from 49 days in 2019 to 65 days in 2020, and further to 67 days in 2021, indicating a slower collection process during these years. Thereafter, the period shortened to 55 days in 2022 and further improved to 53 days in 2023. These changes mirror the improvement seen in receivables turnover, suggesting that the company has been able to collect outstanding payments more rapidly after 2021.
- Overall Insight
- The data indicates a period of diminished receivables efficiency in 2020 and 2021, likely impacted by external or operational challenges. Since 2022, there is a clear recovery trend with better receivables management and faster cash collection. The improvements in the last two years highlight enhanced credit and collection policies or a stronger customer payment behavior.
Average Payables Payment Period
Hilton Worldwide Holdings Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Consumer Services | ||||||
| Average Payables Payment Period, 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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover Ratio
- The payables turnover ratio exhibits a significant decline from 31.19 in 2019 to 19.23 in 2020, indicating a reduction in the frequency with which the company settles its payables during that year. Following 2020, the ratio experiences a gradual recovery, increasing to 21.12 in 2021, further to 23.84 in 2022, before slightly decreasing to 22.4 in 2023. Overall, despite the dip in 2020, the ratio trends upward after that year but does not return to the 2019 level within the observed period.
- Average Payables Payment Period (Days)
- The average payables payment period shows an inverse pattern relative to the payables turnover ratio, increasing sharply from 12 days in 2019 to 19 days in 2020. This change reflects a longer duration taken to pay suppliers during 2020. Subsequently, the payment period shortens progressively to 17 days in 2021, then 15 days in 2022, followed by a slight increase to 16 days in 2023. These fluctuations suggest a tightening and then a slight relaxation in payment practices after the initial extension in 2020.
- Interpretation of Trends
- The data indicates that 2020 marked a year of altered payment behavior, characterized by a reduction in payables turnover and an increase in the payment period. This could imply liquidity constraints or strategic adjustments in managing payables during that year. Following 2020, the company appears to revert toward quicker payment cycles, reflected in a rising turnover ratio and decreasing payment days, although neither metric fully reverts to pre-2020 levels by 2023. The minor reversal in 2023 suggests some variability or a possible stabilization in payment terms.