The fact that betting and gaming has a higher sales proportion and therefore a higher percentage of turnover means that the Hilton group is a potentially good investment, based on the fact that betting and gaming is continuing to grow and advancing rapidly, especially due to the World cup in 2006, which will increase betting significantly.
Overall there are no problems with the solvency of the company; both liquidity and gearing ratios are improving on a yearly basis. Both in the short and long term solvency appear to be steady.
However the cash flow has cause for concern in 2004 as it has a negative cash flow of 8.1million, this may be due to paying higher loan repayments in 2004 which has decreased the cash flow, so the Hilton group needs to manage their cash flow more effectively so they don't have any future solvency problems
[...] The Hilton is taking advantage of credit given and taking control of credit it gives to its customers Segmental Analysis Segmental analysis shows the balance of sales between the betting and gaming and the hotel industry. Obviously Hilton group has a significantly higher amount of sales from its betting and gaming industry than hotels, this could be as technology is improving with more access to everyday gambling through the internet and electronic e-betting. The hotel industry sales seem to be declining with the betting and gaming increasing each year. [...]
[...] We believe the financial analysis of Hilton group is showing that future prospects for the group are good. Most of the ratios show positive movements except for the net profit margin which basically seems due to an increase in expenses incurred. Many of these increased costs seem to be cost pressures for insurance and energy costs and sometimes from union-led wage increases. These are mainly out of the groups control and will be affecting similar companies in the industry which would be reflected in the comparison between industry averages. [...]
[...] Overall the recommendation is that the Hilton group has a lot of potential, due to the fact that the Betting and Gaming industry is growing in popularity because of advances in technology such as e-gaming. This particularly is true in 2006 as betting demand is expected to increase due to the World cup in Germany. Although the Hotel industry is having significant problems with market conditions the Hilton group are potentially expecting 28 hotels to open over the next two years and shows the business is expanding. [...]
[...] The Hilton group only has a short conversion cycle and the ‘buying decision' is made daily. Current assets have increased from 2002 to 2003 because cash in hand has increased by 50%. This is because the group operate on a cash basis usually with most sales occurring upfront. They therefore receive the money well before it is due to be repaid to their creditors. For these reasons the Hilton can therefore operate quite well with a current ratio slightly under 1:1. [...]
[...] The Hilton group in particular has several strengths such as the brand name that has been built up on over a period of many years. This intangible asset reflects the products, services and the quality that will always be in demand. The statement of total recognized gains and losses is an important measure of company's financial performance and in 2004 the recognized gains increased significantly from 2003 which shows an improvement of gains which don't pass through the profit and loss account. [...]
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