Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
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).
An analysis of the solvency ratios from 2019 to 2023 reveals a period of significant volatility followed by a trend of increasing leverage. While the company experienced a severe liquidity challenge in 2020, subsequent years demonstrate a recovery in earnings capacity to service debt, despite a recent increase in the overall debt burden relative to capital.
- Capital and Asset Leverage
- Debt to capital ratios exhibited a general upward trajectory over the five-year period. The ratio rose from 1.06 in 2019 to 1.35 by 2023, with a notable acceleration in leverage occurring in the final year. A similar pattern is observed when including operating lease liabilities, which ended the period at 1.30. Debt to assets ratios peaked in 2020 at 0.63 (0.69 including leases), stabilized between 2021 and 2022, and rose slightly to 0.60 (0.66 including leases) by the end of 2023, indicating that a substantial portion of the company's asset base is financed through debt.
- Debt Service Coverage
- Coverage ratios show an extreme fluctuation, characterized by a sharp decline in 2020 where both interest coverage (-1.15) and fixed charge coverage (-0.66) became negative, signaling an inability to meet these obligations from operating income during that fiscal year. A strong recovery followed, with interest coverage improving to 2.41 in 2021 and peaking at 5.18 in 2022. By 2023, these ratios moderated slightly to 4.65 for interest coverage and 3.91 for fixed charge coverage, yet they remain significantly higher than pre-2020 levels.
- Comparative Solvency Trends
- The divergence between increasing debt-to-capital ratios and improving coverage ratios suggests that while the company has increased its total debt load, its operational earnings have grown at a rate that maintains a comfortable margin for debt servicing. The consistency between the standard ratios and those including operating lease liabilities indicates that lease obligations do not fundamentally alter the solvency profile, though they do marginally increase the total leverage perceived across all asset and capital metrics.
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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 | 39) | 39) | 54) | 56) | 37) | |
| Long-term debt, excluding current maturities | 9,157) | 8,708) | 8,712) | 10,431) | 7,956) | |
| Total debt | 9,196) | 8,747) | 8,766) | 10,487) | 7,993) | |
| Total Hilton stockholders’ deficit | (2,360) | (1,102) | (821) | (1,490) | (482) | |
| Solvency Ratio | ||||||
| Debt to equity1 | — | — | — | — | — | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Airbnb Inc. | 0.24 | 0.36 | 0.42 | — | — | |
| Booking Holdings Inc. | — | 4.51 | 1.77 | — | — | |
| Chipotle Mexican Grill Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| DoorDash, Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Consumer Services | 28.03 | 24.19 | 7.90 | — | — | |
| Debt to Equity, Industry | ||||||
| Consumer Discretionary | 1.34 | 1.51 | 1.50 | — | — | |
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
= 9,196 ÷ -2,360 = —
2 Click competitor name to see calculations.
The solvency profile is characterized by a persistent stockholders' deficit and fluctuating levels of total debt, indicating a highly leveraged capital structure where liabilities exceed assets.
- Total Debt Trends
- Total debt exhibited a significant increase between 2019 and 2020, rising from 7,993 million US$ to a peak of 10,487 million US$. This was followed by a period of contraction and stabilization, with debt levels dropping to 8,766 million US$ in 2021 and remaining relatively flat at 8,747 million US$ in 2022. By the end of 2023, total debt trended upward again to 9,196 million US$.
- Stockholders' Deficit Evolution
- A consistent stockholders' deficit was observed throughout the five-year period. The deficit deepened from -482 million US$ in 2019 to -1,490 million US$ in 2020. Although a partial recovery occurred in 2021, with the deficit narrowing to -821 million US$, a downward trend resumed in 2022 and accelerated sharply in 2023, reaching -2,360 million US$.
- Debt to Equity Interpretation
- The combination of increasing total debt and a widening stockholders' deficit results in a negative debt-to-equity orientation. The substantial expansion of the deficit in 2023, coinciding with a rise in total debt, indicates a deterioration in the equity base and an increased reliance on borrowed capital to fund operations and assets.
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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 | 39) | 39) | 54) | 56) | 37) | |
| Long-term debt, excluding current maturities | 9,157) | 8,708) | 8,712) | 10,431) | 7,956) | |
| Total debt | 9,196) | 8,747) | 8,766) | 10,487) | 7,993) | |
| Operating lease liabilities, current | 116) | 112) | 140) | 170) | 133) | |
| Operating lease liabilities, non-current | 808) | 832) | 870) | 971) | 1,037) | |
| Total debt (including operating lease liability) | 10,120) | 9,691) | 9,776) | 11,628) | 9,163) | |
| Total Hilton stockholders’ deficit | (2,360) | (1,102) | (821) | (1,490) | (482) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | — | — | — | — | — | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Airbnb Inc. | 0.28 | 0.42 | 0.51 | — | — | |
| Booking Holdings Inc. | — | 4.75 | 1.85 | — | — | |
| Chipotle Mexican Grill Inc. | 1.32 | 1.58 | 1.53 | — | — | |
| DoorDash, Inc. | 0.08 | 0.08 | 0.09 | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Consumer Services | 38.47 | 33.45 | 11.35 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | 1.69 | 1.90 | 1.87 | — | — | |
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
= 10,120 ÷ -2,360 = —
2 Click competitor name to see calculations.
An analysis of the solvency position reveals a persistent stockholders' deficit coupled with substantial total debt levels over the five-year period ending December 31, 2023. The capital structure is characterized by negative equity, indicating that total liabilities consistently exceed total assets throughout the observed timeframe.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a significant increase from US$ 9,163 million in 2019 to a peak of US$ 11,628 million in 2020. Following this spike, debt levels declined and remained relatively stable at US$ 9,776 million in 2021 and US$ 9,691 million in 2022, before rising again to US$ 10,120 million by the end of 2023.
- Stockholders' Deficit Analysis
- The stockholders' deficit has widened considerably over the period. From an initial deficit of US$ 482 million in 2019, the balance dropped to US$ 1,490 million in 2020. Although a moderate recovery occurred in 2021, reducing the deficit to US$ 821 million, the trend reversed in subsequent years. The deficit expanded to US$ 1,102 million in 2022 and reached a period high of US$ 2,360 million in 2023.
- Debt to Equity Implications
- The coexistence of high total debt and a deepening stockholders' deficit results in a negative debt-to-equity ratio across all reported years. The acceleration of the deficit in 2023, paired with a moderate increase in debt, indicates a highly leveraged financial position and a further erosion of the equity base, which suggests an increased reliance on debt financing to support operations.
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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 | 39) | 39) | 54) | 56) | 37) | |
| Long-term debt, excluding current maturities | 9,157) | 8,708) | 8,712) | 10,431) | 7,956) | |
| Total debt | 9,196) | 8,747) | 8,766) | 10,487) | 7,993) | |
| Total Hilton stockholders’ deficit | (2,360) | (1,102) | (821) | (1,490) | (482) | |
| Total capital | 6,836) | 7,645) | 7,945) | 8,997) | 7,511) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 1.35 | 1.14 | 1.10 | 1.17 | 1.06 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Airbnb Inc. | 0.20 | 0.26 | 0.29 | — | — | |
| Booking Holdings Inc. | 1.24 | 0.82 | 0.64 | — | — | |
| Chipotle Mexican Grill Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| DoorDash, Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| McDonald’s Corp. | 1.13 | 1.19 | 1.15 | — | — | |
| Starbucks Corp. | 2.08 | 2.41 | 1.57 | 1.96 | — | |
| Debt to Capital, Sector | ||||||
| Consumer Services | 0.97 | 0.96 | 0.89 | — | — | |
| Debt to Capital, Industry | ||||||
| Consumer Discretionary | 0.57 | 0.60 | 0.60 | — | — | |
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
= 9,196 ÷ 6,836 = 1.35
2 Click competitor name to see calculations.
The solvency profile exhibits a trend of increasing financial leverage from 2019 through 2023. A consistent pattern is observed where total debt exceeds total capital, resulting in a debt-to-capital ratio that remains above 1.0 throughout the entire reporting period.
- Total Debt Trends
- Total debt experienced a significant surge in 2020, increasing from 7,993 million US$ to 10,487 million US$. Following this peak, levels were reduced to 8,766 million US$ in 2021 and remained relatively stable through 2022, before rising again to 9,196 million US$ by the end of 2023.
- Total Capital Evolution
- Total capital showed an initial increase in 2020 to 8,997 million US$, but has since entered a period of steady contraction. From 2021 to 2023, total capital declined from 7,945 million US$ to 6,836 million US$, indicating a shrinking capital base.
- Debt to Capital Ratio Analysis
- The debt to capital ratio fluctuated within a range of 1.06 to 1.17 between 2019 and 2022. A notable escalation is observed in 2023, where the ratio reached 1.35. This increase is the result of divergent trends: total debt is rising while total capital is simultaneously decreasing, which intensifies the organization's leverage position.
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Debt to Capital (including Operating Lease Liability)
Hilton Worldwide Holdings Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current maturities of long-term debt | 39) | 39) | 54) | 56) | 37) | |
| Long-term debt, excluding current maturities | 9,157) | 8,708) | 8,712) | 10,431) | 7,956) | |
| Total debt | 9,196) | 8,747) | 8,766) | 10,487) | 7,993) | |
| Operating lease liabilities, current | 116) | 112) | 140) | 170) | 133) | |
| Operating lease liabilities, non-current | 808) | 832) | 870) | 971) | 1,037) | |
| Total debt (including operating lease liability) | 10,120) | 9,691) | 9,776) | 11,628) | 9,163) | |
| Total Hilton stockholders’ deficit | (2,360) | (1,102) | (821) | (1,490) | (482) | |
| Total capital (including operating lease liability) | 7,760) | 8,589) | 8,955) | 10,138) | 8,681) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 1.30 | 1.13 | 1.09 | 1.15 | 1.06 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Airbnb Inc. | 0.22 | 0.30 | 0.34 | — | — | |
| Booking Holdings Inc. | 1.22 | 0.83 | 0.65 | — | — | |
| Chipotle Mexican Grill Inc. | 0.57 | 0.61 | 0.61 | — | — | |
| DoorDash, Inc. | 0.07 | 0.07 | 0.08 | — | — | |
| McDonald’s Corp. | 1.10 | 1.14 | 1.10 | — | — | |
| Starbucks Corp. | 1.48 | 1.58 | 1.29 | 1.46 | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Consumer Services | 0.97 | 0.97 | 0.92 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | 0.63 | 0.65 | 0.65 | — | — | |
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)
= 10,120 ÷ 7,760 = 1.30
2 Click competitor name to see calculations.
The solvency profile between 2019 and 2023 reflects an increasing reliance on debt relative to total capital, characterized by a consistent debt-to-capital ratio exceeding 1.00 throughout the analyzed period.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited notable volatility. An initial surge occurred in 2020, where obligations peaked at 11,628 million US$. While a period of reduction followed in 2021 and 2022, a renewed upward trend emerged in 2023, bringing the total debt to 10,120 million US$.
- Total Capital Trends
- Total capital demonstrated a consistent downward trajectory following a peak in 2020. From a high of 10,138 million US$ in 2020, the capital base contracted annually, reaching 7,760 million US$ by December 31, 2023. This steady erosion of the capital base has intensified the impact of outstanding debt on the overall capital structure.
- Debt to Capital Ratio Analysis
- The debt to capital ratio remained above 1.00 for all five years, indicating that total debt obligations consistently exceeded total capital. The ratio progressed from 1.06 in 2019 to 1.30 in 2023. The significant increase observed in 2023 is the result of a diverging trend where total debt increased while total capital decreased, marking the highest level of financial leverage within the observed timeframe.
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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 | 39) | 39) | 54) | 56) | 37) | |
| Long-term debt, excluding current maturities | 9,157) | 8,708) | 8,712) | 10,431) | 7,956) | |
| Total debt | 9,196) | 8,747) | 8,766) | 10,487) | 7,993) | |
| Total assets | 15,401) | 15,512) | 15,441) | 16,755) | 14,957) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.60 | 0.56 | 0.57 | 0.63 | 0.53 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Airbnb Inc. | 0.10 | 0.12 | 0.14 | — | — | |
| Booking Holdings Inc. | 0.59 | 0.49 | 0.46 | — | — | |
| Chipotle Mexican Grill Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| DoorDash, Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| McDonald’s Corp. | 0.73 | 0.74 | 0.66 | — | — | |
| Starbucks Corp. | 0.52 | 0.53 | 0.47 | 0.54 | — | |
| Debt to Assets, Sector | ||||||
| Consumer Services | 0.49 | 0.49 | 0.46 | — | — | |
| Debt to Assets, Industry | ||||||
| Consumer Discretionary | 0.34 | 0.35 | 0.36 | — | — | |
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
= 9,196 ÷ 15,401 = 0.60
2 Click competitor name to see calculations.
The solvency profile between 2019 and 2023 indicates a period of increased leverage centered around 2020, followed by a brief stabilization and a subsequent rise in the debt-to-assets ratio by the end of 2023.
- Debt and Asset Trends
- Total debt grew from US$ 7,993 million in 2019 to a peak of US$ 10,487 million in 2020. A reduction occurred in 2021, with debt falling to US$ 8,766 million, and remained stable at US$ 8,747 million in 2022, before increasing to US$ 9,196 million in 2023. Total assets followed a similar trajectory, peaking at US$ 16,755 million in 2020 and settling at US$ 15,401 million by 2023.
- Debt to Assets Ratio Analysis
- The debt to assets ratio increased from 0.53 in 2019 to 0.63 in 2020. This was followed by a decline to 0.57 in 2021 and 0.56 in 2022. In 2023, the ratio rose to 0.60, reflecting an increase in total debt relative to a slightly decreasing asset base.
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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 | 39) | 39) | 54) | 56) | 37) | |
| Long-term debt, excluding current maturities | 9,157) | 8,708) | 8,712) | 10,431) | 7,956) | |
| Total debt | 9,196) | 8,747) | 8,766) | 10,487) | 7,993) | |
| Operating lease liabilities, current | 116) | 112) | 140) | 170) | 133) | |
| Operating lease liabilities, non-current | 808) | 832) | 870) | 971) | 1,037) | |
| Total debt (including operating lease liability) | 10,120) | 9,691) | 9,776) | 11,628) | 9,163) | |
| Total assets | 15,401) | 15,512) | 15,441) | 16,755) | 14,957) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.66 | 0.62 | 0.63 | 0.69 | 0.61 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Airbnb Inc. | 0.11 | 0.15 | 0.18 | — | — | |
| Booking Holdings Inc. | 0.62 | 0.52 | 0.48 | — | — | |
| Chipotle Mexican Grill Inc. | 0.50 | 0.54 | 0.53 | — | — | |
| DoorDash, Inc. | 0.05 | 0.05 | 0.06 | — | — | |
| McDonald’s Corp. | 0.95 | 0.97 | 0.92 | — | — | |
| Starbucks Corp. | 0.83 | 0.84 | 0.75 | 0.84 | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Consumer Services | 0.67 | 0.67 | 0.67 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | 0.43 | 0.44 | 0.44 | — | — | |
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
= 10,120 ÷ 15,401 = 0.66
2 Click competitor name to see calculations.
The solvency profile of the organization over the analyzed five-year period exhibits a pattern of volatility centered around a peak in leverage in 2020, followed by a stabilization phase and a recent moderate increase. The debt-to-assets ratio, including operating lease liabilities, indicates a consistent reliance on borrowed capital to finance a significant portion of the asset base, with the ratio fluctuating between 0.61 and 0.69.
- Leverage Peak (2019–2020)
- A significant increase in the debt-to-assets ratio is observed between 2019 and 2020, rising from 0.61 to 0.69. This shift was driven by a substantial increase in total debt, which grew from US$ 9,163 million to US$ 11,628 million. While total assets also expanded during this period to US$ 16,755 million, the growth in liabilities outpaced asset growth, resulting in higher overall leverage.
- Deleveraging Phase (2021–2022)
- A downward trend in the solvency ratio followed the 2020 peak, with the ratio declining to 0.63 in 2021 and reaching 0.62 in 2022. This improvement in the solvency position was characterized by a reduction in total debt, which fell to US$ 9,691 million by the end of 2022, suggesting a period of debt repayment or liability management.
- Recent Solvency Shift (2023)
- In 2023, the debt-to-assets ratio increased to 0.66. This upward movement was the result of a dual impact: total debt rose to US$ 10,120 million while total assets experienced a slight contraction to US$ 15,401 million. This indicates a renewed increase in the proportion of the company's assets funded through debt and operating lease obligations.
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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 | 15,401) | 15,512) | 15,441) | 16,755) | 14,957) | |
| Total Hilton stockholders’ deficit | (2,360) | (1,102) | (821) | (1,490) | (482) | |
| Solvency Ratio | ||||||
| Financial leverage1 | — | — | — | — | — | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Airbnb Inc. | 2.53 | 2.88 | 2.87 | — | — | |
| Booking Holdings Inc. | — | 9.12 | 3.83 | — | — | |
| Chipotle Mexican Grill Inc. | 2.63 | 2.93 | 2.90 | — | — | |
| DoorDash, Inc. | 1.59 | 1.45 | 1.46 | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Consumer Services | 57.76 | 49.57 | 17.02 | — | — | |
| Financial Leverage, Industry | ||||||
| Consumer Discretionary | 3.95 | 4.32 | 4.22 | — | — | |
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
= 15,401 ÷ -2,360 = —
2 Click competitor name to see calculations.
The financial position from 2019 to 2023 is characterized by a persistent negative equity balance, indicating that total liabilities have consistently exceeded total assets throughout the period.
- Asset Trends
- Total assets exhibited relative stability, fluctuating within a narrow range. A peak of 16,755 million US dollars was recorded in 2020, followed by a slight contraction and stabilization at approximately 15,401 million US dollars by the end of 2023.
- Stockholders' Deficit Trends
- The stockholders' deficit demonstrated a significant overall expansion. Starting at 482 million US dollars in 2019, the deficit widened to 2,360 million US dollars by 2023. Although a temporary reduction to 821 million US dollars occurred in 2021, the subsequent years showed a continued increase in the deficit.
- Financial Leverage Implications
- The presence of a stockholders' deficit results in negative financial leverage ratios, signaling a capital structure heavily dependent on debt. The widening gap between the stable asset base and the growing deficit suggests a trend of increasing financial leverage and a total absence of an equity buffer to absorb losses.
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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 | 1,141) | 1,255) | 410) | (715) | 881) | |
| Add: Net income attributable to noncontrolling interest | 10) | 2) | (3) | (5) | 5) | |
| Add: Income tax expense | 541) | 477) | 153) | (204) | 358) | |
| Add: Interest expense | 464) | 415) | 397) | 429) | 414) | |
| Earnings before interest and tax (EBIT) | 2,156) | 2,149) | 957) | (495) | 1,658) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 4.65 | 5.18 | 2.41 | -1.15 | 4.00 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Airbnb Inc. | 26.33 | 83.88 | 0.31 | — | — | |
| Booking Holdings Inc. | 7.11 | 11.03 | 5.39 | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| DoorDash, Inc. | — | -698.50 | -32.07 | — | — | |
| McDonald’s Corp. | 8.73 | 7.48 | 8.70 | — | — | |
| Starbucks Corp. | 10.82 | 9.76 | 12.40 | 3.66 | — | |
| Interest Coverage, Sector | ||||||
| Consumer Services | 9.51 | 9.43 | 7.55 | — | — | |
| Interest Coverage, Industry | ||||||
| Consumer Discretionary | 12.23 | 9.30 | 13.23 | — | — | |
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
= 2,156 ÷ 464 = 4.65
2 Click competitor name to see calculations.
The analysis of solvency indicators from 2019 to 2023 reveals a period of significant volatility followed by a strong recovery in operational capacity to service debt. The most prominent feature is the sharp contraction experienced in 2020, which transitioned into a consistent upward trajectory in profitability through 2023.
- Earnings Before Interest and Tax (EBIT)
- Operational earnings experienced a severe decline in 2020, falling from 1,658 million US$ to a deficit of 495 million US$. This contraction was followed by a robust recovery, with EBIT rising to 957 million US$ in 2021 and peaking at 2,156 million US$ by the end of 2023. This represents a substantial increase in operating profit compared to pre-2020 levels.
- Interest Expense Stability
- Interest expenses remained relatively stable throughout the five-year period, fluctuating within a narrow range between 397 million US$ and 464 million US$. The lack of significant volatility in interest costs, despite the drastic swing in EBIT, suggests a consistent debt structure and predictable financing costs.
- Interest Coverage Ratio
- The interest coverage ratio reflects the operational volatility, dropping from a healthy 4.00 in 2019 to -1.15 in 2020, indicating an inability to cover interest obligations from operating profits during that fiscal year. A recovery phase began in 2021 with a ratio of 2.41, reaching a peak of 5.18 in 2022. By December 31, 2023, the ratio settled at 4.65, signifying a restored and strengthened capacity to meet interest payments compared to the baseline of 2019.
Overall, the data indicates that while the organization faced a critical solvency challenge in 2020, the subsequent expansion of EBIT has resulted in a more favorable interest coverage position. The current ratio suggests a comfortable margin of safety for debt servicing.
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Fixed Charge Coverage
Hilton Worldwide Holdings Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Hilton stockholders | 1,141) | 1,255) | 410) | (715) | 881) | |
| Add: Net income attributable to noncontrolling interest | 10) | 2) | (3) | (5) | 5) | |
| Add: Income tax expense | 541) | 477) | 153) | (204) | 358) | |
| Add: Interest expense | 464) | 415) | 397) | 429) | 414) | |
| Earnings before interest and tax (EBIT) | 2,156) | 2,149) | 957) | (495) | 1,658) | |
| Add: Operating lease expense for fixed payments | 118) | 113) | 125) | 129) | 144) | |
| Earnings before fixed charges and tax | 2,274) | 2,262) | 1,082) | (366) | 1,802) | |
| Interest expense | 464) | 415) | 397) | 429) | 414) | |
| Operating lease expense for fixed payments | 118) | 113) | 125) | 129) | 144) | |
| Fixed charges | 582) | 528) | 522) | 558) | 558) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 3.91 | 4.28 | 2.07 | -0.66 | 3.23 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Airbnb Inc. | 15.91 | 20.69 | 0.42 | — | — | |
| Booking Holdings Inc. | 6.09 | 8.12 | 3.82 | — | — | |
| Chipotle Mexican Grill Inc. | 4.71 | 3.98 | 3.23 | — | — | |
| DoorDash, Inc. | -3.94 | -15.86 | -6.02 | — | — | |
| McDonald’s Corp. | 4.62 | 3.92 | 4.32 | — | — | |
| Starbucks Corp. | 3.51 | 3.08 | 3.61 | 1.58 | — | |
| Fixed Charge Coverage, Sector | ||||||
| Consumer Services | 4.61 | 4.03 | 3.55 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Consumer Discretionary | 4.95 | 3.65 | 5.60 | — | — | |
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
= 2,274 ÷ 582 = 3.91
2 Click competitor name to see calculations.
The analysis of the fixed charge coverage indicates a period of extreme volatility followed by a robust recovery in the ability to service fixed obligations. A significant solvency contraction occurred in 2020, which was subsequently reversed, leading to a strengthened financial position by the end of 2023.
- Earnings Before Fixed Charges and Tax
- A substantial decline is observed in 2020, where earnings fell to negative 366 million USD from 1,802 million USD in 2019. This was followed by a consistent recovery, with earnings rising to 1,082 million USD in 2021 and reaching 2,274 million USD by 2023, indicating that profitability levels have surpassed pre-crisis figures.
- Fixed Charge Obligations
- Fixed charges exhibited stability over the five-year period, fluctuating within a narrow range between 522 million USD and 582 million USD. This consistency suggests a stable debt and lease structure that remained largely unaffected by the operational volatility experienced during the 2020 fiscal year.
- Fixed Charge Coverage Ratio
- The coverage ratio mirrored the volatility of earnings, dropping to -0.66 in 2020, signifying an inability to cover fixed charges from operating earnings. A recovery was established in 2021 with a ratio of 2.07, peaking at 4.28 in 2022. Although the ratio moderated slightly to 3.91 in 2023, this remains a significant improvement over the 2019 baseline of 3.23, reflecting enhanced solvency and a decreased risk profile.
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