Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Hilton Worldwide Holdings Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Receivables Turnover
- The receivables turnover ratio displays a declining trend from early 2020 through the first quarter of 2021, dropping from 8.25 to 4.09. This indicates a slower pace in collecting receivables during that period. Following this low point, the ratio gradually improves, reaching levels around 6.3 to 7.2 between 2022 and mid-2024, suggesting enhanced efficiency in receivables collection. The fluctuations after the initial recovery are relatively moderate, indicating some stabilization but still below the early 2020 value.
- Working Capital Turnover
- This ratio exhibits significant volatility. It sharply decreases from 9.87 in the first quarter of 2020 to 3.19 by the second quarter, and further down to 2.43 by the end of the same year. A notable anomaly appears in the third quarter of 2021 with a sudden jump to 67.25, which might indicate an unusual event or data irregularity. Beyond this point, data is missing, so trend analysis is limited. The initial sharp decline suggests decreased effectiveness in working capital utilization during 2020, potentially due to operational disruptions.
- Average Receivable Collection Period
- The average collection period in days increases from 44 days in the first quarter of 2020 to a peak of 89 days by March 2021, reinforcing the observation of slower receivables turnover during this timeframe. Subsequently, there is a consistent reduction in days required to collect receivables, reaching approximately 51 to 53 days from early 2023 through mid-2024. This downward trend implies improving collection efficiency and cash conversion cycles over the latter periods.
Turnover Ratios
Average No. Days
Receivables Turnover
Hilton Worldwide Holdings Inc., receivables turnover calculation (quarterly data)
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Revenues | 2,951) | 2,573) | 2,609) | 2,673) | 2,660) | 2,293) | 2,444) | 2,368) | 2,240) | 1,721) | 1,836) | 1,749) | 1,329) | 874) | 890) | 933) | 564) | 1,920) | ||||||
| Accounts receivable, net of allowance for credit losses | 1,578) | 1,467) | 1,487) | 1,396) | 1,402) | 1,298) | 1,327) | 1,278) | 1,289) | 1,054) | 1,068) | 1,012) | 952) | 797) | 771) | 890) | 827) | 1,111) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Receivables turnover1 | 6.85 | 7.17 | 6.88 | 7.21 | 6.97 | 7.20 | 6.61 | 6.39 | 5.85 | 6.30 | 5.42 | 4.78 | 4.23 | 4.09 | 5.59 | 6.50 | 8.76 | 8.25 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||
| Airbnb Inc. | 60.03 | 58.52 | 48.38 | 46.60 | 41.69 | 47.07 | 52.17 | 53.27 | 43.30 | 53.74 | — | — | — | — | — | — | — | — | ||||||
| Booking Holdings Inc. | 5.87 | 6.68 | 6.57 | 5.98 | 6.90 | 8.87 | 7.67 | 7.01 | 6.51 | 7.77 | 8.07 | 5.93 | 5.57 | 9.64 | — | — | — | — | ||||||
| Chipotle Mexican Grill Inc. | 109.32 | 113.59 | 85.44 | 134.08 | 152.24 | 136.37 | 80.79 | 118.06 | 97.41 | 87.64 | 75.77 | 94.54 | 90.40 | 92.26 | — | — | — | — | ||||||
| DoorDash, Inc. | 16.43 | 16.69 | 16.20 | 19.54 | 20.07 | 18.75 | 16.46 | 18.66 | 16.30 | 16.41 | — | — | — | — | — | — | — | — | ||||||
| McDonald’s Corp. | 4.10 | 4.41 | 3.92 | 4.22 | 4.12 | 4.18 | 4.14 | 4.80 | 5.20 | 5.93 | 5.23 | 5.19 | 5.07 | 4.77 | — | — | — | — | ||||||
| Starbucks Corp. | 32.90 | 31.49 | 30.38 | 30.71 | 28.67 | 28.30 | 27.44 | 27.91 | 31.27 | 29.45 | 30.92 | 29.76 | 27.09 | 26.09 | 26.62 | 27.31 | 28.33 | 29.70 | ||||||
Based on: 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2024 Calculation
Receivables turnover
= (RevenuesQ2 2024
+ RevenuesQ1 2024
+ RevenuesQ4 2023
+ RevenuesQ3 2023)
÷ Accounts receivable, net of allowance for credit losses
= (2,951 + 2,573 + 2,609 + 2,673)
÷ 1,578 = 6.85
2 Click competitor name to see calculations.
The financial data reveals several trends in the company's quarterly performance over multiple years, focusing on revenues, accounts receivable, and receivables turnover ratio.
- Revenues
- The revenue figures exhibit notable fluctuations, particularly in the early 2020 quarters, with a significant drop from 1920 million USD in March 2020 to 564 million USD in June 2020. This abrupt decline is followed by a gradual recovery through the rest of 2020 and into 2021. Beginning in 2021, revenues trend upwards consistently, peaking in the second quarter of 2024 at 2951 million USD. This suggests an overall recovery and growth in the company’s operational income after initial volatility.
- Accounts Receivable, Net of Allowance for Credit Losses
- The accounts receivable balance generally increases over the analyzed period, starting from 1111 million USD in March 2020 and rising to 1578 million USD by June 2024. The growth in receivables is consistent with the increase in revenues over the years, indicating a proportional increase in credit sales or outstanding customer balances. Periods with revenue declines or slower revenue growth sometimes coincide with stabilizing or mildly fluctuating receivables, suggesting cautious credit management during uncertain revenue phases.
- Receivables Turnover Ratio
- The receivables turnover ratio shows a downward trend in early 2020, falling from 8.25 in March 2020 to a low of 4.09 in March 2021. This decrease implies that the company took longer to collect receivables during this period, potentially due to market disruptions or customer payment delays. Starting mid-2021, the ratio improves steadily, reaching levels above 7 by early 2023, which indicates enhanced efficiency in collecting receivables. The ratio stabilizes around 6.8 to 7.2 in subsequent periods, suggesting consistent collection performance in conjunction with increasing revenue volumes.
In summary, the company experienced significant revenue disruptions in early 2020 with a gradual recovery and growth thereafter. Accounts receivable balances increased over time, following revenue trends. The receivables turnover ratio initially declined, indicating longer collection periods during the downturn, but improved and stabilized from mid-2021 onward, reflecting enhanced operational efficiency in accounts receivable management.
Working Capital Turnover
Hilton Worldwide Holdings Inc., working capital turnover calculation (quarterly data)
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current assets | 2,689) | 3,183) | 2,614) | 2,484) | 2,580) | 2,561) | 2,870) | 2,976) | 2,840) | 2,861) | 2,871) | 2,694) | 2,379) | 3,468) | 4,202) | 4,584) | 4,577) | 3,149) | ||||||
| Less: Current liabilities | 4,226) | 3,774) | 3,722) | 3,561) | 3,435) | 3,390) | 3,372) | 3,365) | 3,195) | 3,085) | 3,019) | 2,622) | 2,779) | 2,476) | 2,431) | 2,299) | 2,306) | 2,220) | ||||||
| Working capital | (1,537) | (591) | (1,108) | (1,077) | (855) | (829) | (502) | (389) | (355) | (224) | (148) | 72) | (400) | 992) | 1,771) | 2,285) | 2,271) | 929) | ||||||
| Revenues | 2,951) | 2,573) | 2,609) | 2,673) | 2,660) | 2,293) | 2,444) | 2,368) | 2,240) | 1,721) | 1,836) | 1,749) | 1,329) | 874) | 890) | 933) | 564) | 1,920) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Working capital turnover1 | — | — | — | — | — | — | — | — | — | — | — | 67.25 | — | 3.29 | 2.43 | 2.53 | 3.19 | 9.87 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||
| Airbnb Inc. | 1.64 | 1.64 | 1.51 | 1.25 | 1.41 | 1.31 | 1.22 | 1.17 | 1.13 | 1.10 | — | — | — | — | — | — | — | — | ||||||
| Booking Holdings Inc. | 7.26 | 6.04 | 5.77 | 3.65 | 2.82 | 2.77 | 2.33 | 4.14 | 3.16 | 2.32 | 1.59 | 1.07 | 1.02 | 0.74 | — | — | — | — | ||||||
| Chipotle Mexican Grill Inc. | 14.35 | 15.74 | 16.73 | 16.40 | 16.17 | 24.45 | 34.00 | 32.42 | 37.95 | 29.78 | 14.86 | 10.78 | 11.18 | 10.14 | — | — | — | — | ||||||
| DoorDash, Inc. | 3.71 | 3.82 | 3.95 | 3.78 | 4.09 | 3.70 | 3.03 | 2.45 | 2.01 | 1.98 | — | — | — | — | — | — | — | — | ||||||
| McDonald’s Corp. | 33.38 | — | 8.64 | 3.33 | 7.11 | 3.99 | 5.39 | 4.03 | 6.64 | 23.54 | 3.13 | 5.58 | 5.19 | 9.32 | — | — | — | — | ||||||
| Starbucks Corp. | — | — | — | — | — | — | — | — | — | — | 18.11 | 205.59 | 50.26 | 48.92 | 51.17 | — | — | — | ||||||
Based on: 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2024 Calculation
Working capital turnover
= (RevenuesQ2 2024
+ RevenuesQ1 2024
+ RevenuesQ4 2023
+ RevenuesQ3 2023)
÷ Working capital
= (2,951 + 2,573 + 2,609 + 2,673)
÷ -1,537 = —
2 Click competitor name to see calculations.
The financial data reveals several notable trends in working capital, revenues, and working capital turnover over the analyzed periods.
- Working Capital
- Working capital exhibited significant fluctuations across the quarters. Initially, it increased from 929 million USD to a peak of 2,285 million USD between March and September 2020. However, from the end of 2020 onwards, working capital consistently declined, turning negative by mid-2021 and continuing to deteriorate through mid-2024. The most substantial negative values occurred towards the end of the period, reaching a low of approximately -1,537 million USD in June 2024. This trend indicates tightening liquidity or a possible increase in current liabilities relative to current assets over time.
- Revenues
- Revenues displayed a generally upward trajectory with some volatility, reflecting recovery and growth phases. Starting at 1,920 million USD in March 2020, revenues dropped sharply in the second quarter of 2020 to 564 million USD, likely impacted by external factors during that period. Thereafter, a recovery trend is observable, with revenues rising to roughly 2,951 million USD by June 2024. Despite some quarterly fluctuations, including mild decreases at certain points, the overall pattern demonstrates steady revenue growth and expansion in later quarters.
- Working Capital Turnover
- Working capital turnover ratios showed limited and incomplete data points, but the available figures suggest variability. The ratio started relatively high at 9.87 in March 2020 and declined in the following quarters to around 2.43 by December 2020. An outlier ratio of 67.25 appears in the September 2021 quarter, indicating an unusual or exceptional situation, possibly due to a very low working capital value or other financial anomalies. The absence of data in other periods restricts comprehensive analysis, but the initial declining trend suggests decreasing efficiency in utilizing working capital to generate revenues during the earlier phases.
In summary, the data portrays a scenario of increasing revenues juxtaposed with a decline in working capital, which may imply growing sales but potentially tighter short-term financial flexibility. The declining and negative working capital figures towards the later periods could signal challenges in managing current obligations, despite the strong revenue performance. The working capital turnover ratio data is insufficient for definitive conclusions but indicates early efficiency declines followed by volatility.
Average Receivable Collection Period
Hilton Worldwide Holdings Inc., average receivable collection period calculation (quarterly data)
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Receivables turnover | 6.85 | 7.17 | 6.88 | 7.21 | 6.97 | 7.20 | 6.61 | 6.39 | 5.85 | 6.30 | 5.42 | 4.78 | 4.23 | 4.09 | 5.59 | 6.50 | 8.76 | 8.25 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average receivable collection period1 | 53 | 51 | 53 | 51 | 52 | 51 | 55 | 57 | 62 | 58 | 67 | 76 | 86 | 89 | 65 | 56 | 42 | 44 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||
| Airbnb Inc. | 6 | 6 | 8 | 8 | 9 | 8 | 7 | 7 | 8 | 7 | — | — | — | — | — | — | — | — | ||||||
| Booking Holdings Inc. | 62 | 55 | 56 | 61 | 53 | 41 | 48 | 52 | 56 | 47 | 45 | 62 | 66 | 38 | — | — | — | — | ||||||
| Chipotle Mexican Grill Inc. | 3 | 3 | 4 | 3 | 2 | 3 | 5 | 3 | 4 | 4 | 5 | 4 | 4 | 4 | — | — | — | — | ||||||
| DoorDash, Inc. | 22 | 22 | 23 | 19 | 18 | 19 | 22 | 20 | 22 | 22 | — | — | — | — | — | — | — | — | ||||||
| McDonald’s Corp. | 89 | 83 | 93 | 87 | 89 | 87 | 88 | 76 | 70 | 62 | 70 | 70 | 72 | 76 | — | — | — | — | ||||||
| Starbucks Corp. | 11 | 12 | 12 | 12 | 13 | 13 | 13 | 13 | 12 | 12 | 12 | 12 | 13 | 14 | 14 | 13 | 13 | 12 | ||||||
Based on: 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.85 = 53
2 Click competitor name to see calculations.
The analysis of the receivables turnover and average receivable collection period over the examined periods reveals important trends regarding the company's efficiency in managing its accounts receivable.
- Receivables Turnover
- The receivables turnover ratio experienced a notable decline from 8.25 to a low of 4.09 between March 2020 and March 2021. This trend indicates a slowdown in the frequency of collecting receivables during this period. However, starting in the second quarter of 2021, there was a gradual recovery, with the ratio increasing to around 7.2 by March 2023. This suggests improved collection efficiency. Despite some fluctuations, the ratio remained relatively stable between approximately 6.85 and 7.21 through to June 2024, reflecting more consistent collection performance in recent quarters.
- Average Receivable Collection Period
- The average number of days to collect receivables showed an inverse trend compared to the turnover ratio. The collection period increased sharply from 44 days in March 2020 to a peak of 89 days in March 2021, indicating a lengthening in the time required to collect payments. Following that peak, the collection period steadily decreased, reaching a range of approximately 51 to 53 days from March 2023 through to June 2024. This improvement signifies enhanced efficiency in receivable collections post-pandemic pressures.
- Overall Insights
- The trends suggest that the company faced significant challenges in managing receivables during the early stages of the analyzed timeframe, likely influenced by external factors during 2020 and early 2021. The subsequent recovery period exhibits a positive trajectory towards restoring operational efficiency, with turnover ratios improving and collection periods shortening. The stabilization of these metrics in recent quarters indicates that the company has adapted to prevailing conditions and maintained better control over its accounts receivable management.