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ACTIVITY RATIO - EFFICIENCY RATIO An activity ratio is a type of financial metric that indicates how efficiently a company is leveraging the assets on its balance sheet, to generate revenues and cash Commonly referred to as efficiency ratios, activity ratios help analysts gauge how a company handles inventory management, which is key to its operational fluidity and overall fiscal health (Will Kenton 2020) Figure 2: The efficiency ratio chart shows the trends of Fixed Asset Turnover (FAT), Account Payable Days (APP), Account Receivable Days (ACP), and Cash Conversion Cycle (CCC) The fixed asset turnover ratio is a metric that measures how effectively a company generates sales using its fixed assets There's no ideal ratio that's considered a benchmark for all industries Instead, investors should compare a company's fixed asset turnover ratio to those of other companies in the same sector (Laura Green, 2021) Based on the chart, we can see that the company's fixed asset turnover in the period 2016 - 2020 was relatively high, but it is lowest in 2016 with 1.39 rounds and approximately industry fixed asset turnover is 1.29 due to the company expanding production and increasing investment in production activities In 2018, fixed asset turnover in 2018 was 24.74 rounds per years higher many times than the industry average, which is understandable given that the period of 2018 was a period of growth Economic growth, more affordable air travel, technological change, new business models and visa facilitation have all contributed to the growth of the international tourism industry over the years recently In 2020, fixed asset turnover in 2020 higher many times than 2019 due to the impact of the Covid epidemic, affecting the business activities of the company The cash conversion cycle (CCC) is a metric that expresses the time (measured in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales Also called the Net Operating Cycle or simply Cash Cycle, CCC attempts to measure how long each net input dollar is tied up in the production and sales process before it gets converted into cash received (Adam Hayes, 2021) Based on the data table, we can see that the Cash conversion cycle for the period 2016 - 2020 is very high compared to the industry average It is in the range of to times the industry average In the period of 2017 - 2019, Cash conversion cycle of the company is still at a safe level compared to the industry average, which proves that the company has a decreasing or stable trend of Cash conversion cycle for many years, which is a good sign The sudden increase of Cash conversion cycle in 2020 proves that the cash amount of businesses is increasingly scarce for production and business activities and for other activities such as investment Businesses need to balance in the Cash conversion cycle to ensure the company's business operations Avg A/R Days 2020 86.3 2019 47.1 2018 45.4 2017 40.7 2016 52.0 The receivables turnover ratio is an accounting measure used to quantify a company's effectiveness in collecting its accounts receivable, or the money owed by customers or clients This ratio measures how well a company uses and manages the credit it extends to customers and how quickly that short-term debt is collected or is paid (Chris B Murphy, 2021) In 2017, the reason for the decrease in average collection time was that in 2017 net sales decreased from $11,663 millions to $9,140 millions The delay in net sales was due to the implementation of the credit tightening policy in 2017 which made net sales decrease sharply Because of the specifics of the company's business, we can see that the average account receivable days is high compared to other industries because the money collected from the service is calculated from the time the customer makes a reservation until the customer checks out That time can be quite long For the period 2018 - 2020, the company's receivable turnover increased from 45.4 to 86.3 rounds This tells me that at this stage the company is loosening its trade credit policy, despite an increase in revenue Based on the above analysis, we can see that the company needs to adjust its credit policy to limit capital misappropriation in business and investment activities 2020 2019 2018 2017 2016 Avg A/P Days 31.1 18.6 19.4 22.3 The accounts payable turnover ratio is a short-term liquidity measure used to quantify the rate at which a company pays off its suppliers Accounts payable turnover shows how many times a company pays off its accounts payable during a period (Chris B Murphy, 2020) In 2016 average account payables days at days, in 2017 this figure increased to 22.3 days The payables turnover ratio in 2018 and 2019 is smaller than that of 2017 which proves that the enterprise is appropriating capital and paying slower than the previous year If the payables turnover ratio is too small (large payables), there is a potential risk of liquidity However, the company has taken advantage of this capital appropriation, which can help the business reduce capital costs, and at the same time demonstrate its reputation in terms of payment relationship with suppliers and product quality for customers This index improved in 2020, partly due to the company increasing its liquidity and working capital in 2020 in response to the company's difficult situation DEBT RATIO - LEVERAGE RATIO Debt/EBITDA - earnings before interest, taxes, depreciation, and amortization - is a ratio measuring the amount of income generated and available to pay down debt before covering interest, taxes, depreciation, and amortization expenses Debt/EBITDA measures a company's ability to pay off its incurred debt A high ratio result could indicate a company has a too-heavy debt load (Will Kenton 2020) Hilton Inc have the (total Debt - Cash)/EBITDA ratio for the period 2016 – 2020 ranged from 3.61 to 27.89 The highest debt level fell in 2020 at 27.89 because the debt which use by Hilton is suddenlt increased to $18.245 million compared to other years This shows that Hilton Inc with this ratio much higher in 2020 than the industry average (more than times) may indicate a company with excessive debt burden This can make the company's debt risk high, the company needs to pay attention to the balance between debt and own capital The long-term debt to capitalization ratio, a variation of the traditional debtto-equity (D/E) ratio, shows the financial leverage of a firm It is calculated by dividing long-term debt by total available capital (long-term debt, preferred stock, and common stock) (Adam Hayes, 2021) The company's Long-term Debt to Total Capital ratio is increasing over the years, much higher than the industry average of 50.4% Overall, Long-term Debt Total Capital increased year over year from 52.8% in 2016 to 115.9% in 2020 This shows that the company to use its debt to carry out investment activities to expand production and the company's debt is mainly long-term debt The company's longterm debt is higher than that of its short - term debt MARKET RATIO Figure: The market ratio chart indicates the trends of Price to Earnings ratio by two main elements including stock price and earnings per share (EPS) Source: https://www.macrotrends.net/ The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS) The priceto-earnings ratio is also sometimes known as the price multiple or the earnings multiple (Jason Fernando, 2021) Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares of its common stock The resulting number serves as an indicator of a company's profitability It is common for a company to report EPS that is adjusted for extraordinary items and potential share dilution (Jason Fernando, 2021) According to above figure, the stock price of Hilton Inc decreased from $65.52 to $57.15 in the period 2016 to 2017 whereas it extended to strongly increase in the period 2018 is $77.67 to $82.59 in 2019 However, EPS was reported as negative from 2016 to 2029 which means Hilton was negative in Retained Earnings (Accumulated Deficit) ) Since the negative EPS for that period, the P/E ratio changed suddenly, peaking in 2017 with a value of 248.49 The decrease in P/E index from 2018 - 2020 due to objective factors of the current economic environment, affects the company's profit The impact of the COVID-19 epidemic is also a factor affecting Hilton P/E ratio when the hotel business is closed and temporarily closed, partly due to the low number of international tourism REFERENCES Adam Hayes 2021 ‘Cash Conversion Cycle (CCC)’ Investopedia 09 May 2021, < https://www.investopedia.com/terms/c/cashconversioncycle.asp> Jason Fernando, 2021 ‘Price-to-Earnings (P/E) Ratio’ Investopedia 09 Septenber 2021, Jason Fernando, 2021 ‘Earnings Per Share (EPS)’ Investopedia 08 April 2021, < https://www.investopedia.com/terms/e/eps.asp> Will Kenton, 2020 ‘Activity Ratios Definition’’ Investopedia 18 October 2020, Laura Green, 2021, ‘Fixed Asset Turnover Ratio’ Investopedia 09 August 2021, Chris B Murphy, 2021, ‘Receivables Turnover Ratio’ Investopedia 07 April 2021, Chris B Murphy, 2020, ‘Receivables Turnover Ratio’ Investopedia 29 June 2020, Adam Hayes 2021 ‘Long-Term Debt to Capitalization Ratio’ Investopedia 09 July 2021, Will Kenton, 2020 ‘Debt/EBITDA Ratio’ Investopedia 16 March 2020, Corporate Finance Institute, What are leverage ratios?, Macro Trends n.d., Hilton Worldwide Holdings PE Ratio 2006-2020 | HLT, Macro Trends, Investing.com, Hilton Worldwide Holdings Inc (HLT), World Tourism Organization, International tourism growth continues to outpace the global economy, 20 Jan 2020, EHotelier Editor, International tourism growth remains strong in 2018, 12 Oct 2018, Hilton Worldwide Holdings Inc,