Hilton Hotels Financial Analysis

Document Type:Research Paper

Subject Area:Accounting

Document 1

Being an international business, the company serves a great deal of customers making it necessary for the management to always ensure that it is significantly equipped with relevant resources and technology. This is not only essential towards enabling the company to remain competitive but also towards ensuring that it is able to adequately maximize its overall profit levels. As such, the company can therefore be said to be correctly positioned in the industry. Research suggests that the company is likely to grow at a rate of about 6. 92% which is similar to its competitor hotels and be able to maintain the returns that it is currently generating. In the United States, the company bears 14 world class brands made up of over 100 properties with modern rooms in different states across the country.

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The company is fully committed to meeting its overall mission of being the country’s most hospitable organization which can effect by issuing exceptional services to its customers at all its branches in the country. The hotel remains to be the most recognized hotel brands not only in the country but the world at large. The company mostly attempts to focus on the provision of cost and services which are tailored to meet the specifications of each of its various branches. The management of the hotel often tends to consider factors such as the size of the hotel, the complexity of the business, and the market environment. The revenues would, however, experience a significant decline over the following two quarters (Taylor 70).

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Based on the overall financial records provided by the company, the first quarter of the 2016 fiscal year experienced a net income of $ 309,000,000 which was noted as a 48. 5% increase as compared to the corresponding period in the 2015 fiscal year. Despite the increase in overall income, the company was later faced with a reduction of the amount gained over the following three quarters of the year. The company registered a substantial decline in income making it to experience losses over the final quarter of the year. that ended on the January of 2017 (Pasquini 98). Fiscal Year Ending December 2017 During the 2017 fiscal year, the Hilton hotel company was able to separate into three distinct publicly traded company to ensure that it would be able to unlock the various market opportunities available in the United States.

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This move was also inclined towards enabling the company to take advantage of the tax and capital market efficiencies. This projected a dim outlook for the company in the year. At the beginning of the year, the company projected its overall revenue growth to decrease by a rate of 23. The company has however been able to come up with logical projections based on the various trends experienced so far. The company hopes to witness an 8. 8% increase in total revenues amounting to about $9. 67 billion whereas its earnings are projected to grow by 2% ($2. 08 billion). During the final quarter of the 2016 fiscal year, Hilton was able to repay a total of $3,418 million for the commercial mortgage-backed securities loan obtained in 2013 as well as a total of $450 million for a mortgage loan.

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This amount was aid using the net proceeds obtained in the year and that cash that was available at the time. At the end of the 2016 fiscal year, the company had an outstanding debt balance of $10. 2 billion where $0. 5 was transferred to Hilton Grand Vacation whereas $3. The 2017 current ratio was 1. 33:1 which shows the company’s commitment towards honouring its dues on time. The company had a total of $2,684 as its current liabilities whereas its total liabilities were $20,312 million. Hilton Company experienced a 52 million decrease in stockholder’s equity to $5,899 million as compared to the previous year. According to the current projections based on the introduction of a simplified business model as well as the separation of the companies, the company’s current capitalization structure should be able to enable it to meet its overall business operations without necessarily having to borrow excessively (Koronios 56).

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