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HLT (Hilton Worldwide Holdings) Altman Z-Score : 2.47 (As of Oct. 31, 2024)


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What is Hilton Worldwide Holdings Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Warning Sign:

Altman Z-score of 2.49 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

Hilton Worldwide Holdings has a Altman Z-Score of 2.47, indicating it is in Grey Zones. This implies that Hilton Worldwide Holdings is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Hilton Worldwide Holdings's Altman Z-Score or its related term are showing as below:

HLT' s Altman Z-Score Range Over the Past 10 Years
Min: 0.52   Med: 1.23   Max: 2.49
Current: 2.49

During the past 13 years, Hilton Worldwide Holdings's highest Altman Z-Score was 2.49. The lowest was 0.52. And the median was 1.23.


Hilton Worldwide Holdings Altman Z-Score Historical Data

The historical data trend for Hilton Worldwide Holdings's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Hilton Worldwide Holdings Altman Z-Score Chart

Hilton Worldwide Holdings Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.58 0.74 1.60 1.74 2.22

Hilton Worldwide Holdings Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.05 2.22 2.44 2.45 2.44

Competitive Comparison of Hilton Worldwide Holdings's Altman Z-Score

For the Lodging subindustry, Hilton Worldwide Holdings's Altman Z-Score, along with its competitors' market caps and Altman Z-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Hilton Worldwide Holdings's Altman Z-Score Distribution in the Travel & Leisure Industry

For the Travel & Leisure industry and Consumer Cyclical sector, Hilton Worldwide Holdings's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Hilton Worldwide Holdings's Altman Z-Score falls into.



Hilton Worldwide Holdings Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Hilton Worldwide Holdings's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*-0.055+1.4*-0.1971+3.3*0.1352+0.6*2.8428+1.0*0.6591
=2.47

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Sep. 2024:
Total Assets was $16,689 Mil.
Total Current Assets was $3,573 Mil.
Total Current Liabilities was $4,491 Mil.
Retained Earnings was $-3,290 Mil.
Pre-Tax Income was 491 + 591 + 365 + 274 = $1,721 Mil.
Interest Expense was -140 + -141 + -131 + -124 = $-536 Mil.
Revenue was 2867 + 2951 + 2573 + 2609 = $11,000 Mil.
Market Cap (Today) was $57,252 Mil.
Total Liabilities was $20,139 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(3573 - 4491)/16689
=-0.055

X2=Retained Earnings/Total Assets
=-3290/16689
=-0.1971

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(1721 - -536)/16689
=0.1352

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=57251.688/20139
=2.8428

X5=Revenue/Total Assets
=11000/16689
=0.6591

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Hilton Worldwide Holdings has a Altman Z-Score of 2.47 indicating it is in Grey Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Hilton Worldwide Holdings  (NYSE:HLT) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Hilton Worldwide Holdings Altman Z-Score Related Terms

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Hilton Worldwide Holdings Business Description

Address
7930 Jones Branch Drive, Suite 1100, McLean, VA, USA, 22102
Hilton Worldwide Holdings operates 1.2 million rooms across its more than 20 brands serving the premium economy scale through luxury segments. Hampton and Hilton are the two largest brands, representing 28% and 19%, respectively, of the company's total rooms, as of Dec. 31, 2023. Recent brands launched over the last few years include Home2, Curio, Canopy, Spark, Tru, Tempo, and LivSmart, as well as a partnership with Small Luxury Hotels and acquisitions of Nomad and Graduate Hotels. Managed and franchised hotels represent the vast majority of adjusted EBITDA, predominantly from the Americas regions.
Executives
Laura Fuentes officer: See Remarks 7930 JONES BRANCH DRIVE, MCLEAN VA 22102
Judith Mchale director C/O RALPH LAUREN CORPORATION, 650 MADISON AVENUE, NEW YORK NY 10022
Melanie Healey director VERIZON COMMUNICATIONS INC., 1095 AVENUE OF THE AMERICAS, NEW YORK NY 10036
Christopher J Nassetta director, officer: See Remarks 77 WEST WACKER DRIVE, SUITE 3900, CHICAGO IL 60601
Michael W Duffy officer: See Remarks 7930 JONES BRANCH DRIVE, MCLEAN VA 22102
Anne-marie W D'angelo officer: See Remarks 801 E. 86TH AVENUE, MERRILLVILLE IN 46410
Kristin Ann Campbell officer: See Remarks 500 STAPLES DRIVE, FRAMINGHAM MA 01702
Douglas M Steenland director 2700 LONE OAK PARKWAY, EAGAN MN 55121
Matthew W Schuyler officer: See Remarks 1680 CAPITAL ONE DRIVE, MCLEAN VA 22102
Raymond E Mabus director C/O DANA INCORPORATED, 3939 TECHNOLOGY DRIVE, MAUMEE OH 43537
Kevin J Jacobs officer: See Remarks 7930 JONES BRANCH DRIVE, MCLEAN VA 22102
Martin Rinck officer: See Remarks 7930 JONES BRANCH DRIVE, MCLEAN VA 22102
Christopher W Silcock officer: See Remarks 7930 JONES BRANCH DRIVE, MCLEAN VA 22102
Chris Carr director 7930 JONES BRANCH DRIVE, MCLEAN VA 22102
Jonathan W. Witter officer: See Remarks 1680 CAPITAL ONE DRIVE, MCLEAN VA 22102