Choice Hotels International Inc (CHH)

Working capital turnover

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Revenue (ttm) US$ in thousands 1,544,165 1,547,751 1,536,460 1,477,014 1,401,949 1,324,605 1,233,708 1,144,078 1,069,298 978,053 865,455 738,844 774,072 848,763 948,724 1,114,675 1,114,820 1,091,715 1,072,473 1,050,230
Total current assets US$ in thousands 296,530 352,812 348,134 341,088 347,922 459,149 983,609 788,018 761,661 710,969 607,540 445,144 432,914 415,570 524,479 531,279 236,589 260,264 276,864 250,671
Total current liabilities US$ in thousands 942,690 418,994 406,686 369,574 435,898 426,383 582,351 563,513 570,295 590,594 315,975 243,800 255,847 252,420 218,737 255,420 325,888 316,304 321,008 303,871
Working capital turnover — — — — — 40.43 3.07 5.10 5.59 8.13 2.97 3.67 4.37 5.20 3.10 4.04 — — — —

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,544,165K ÷ ($296,530K – $942,690K)
= —

Choice Hotels International Inc's working capital turnover has experienced variability over the periods presented. The working capital turnover indicates the efficiency of the company in utilizing its working capital to generate sales. A higher turnover ratio implies that the company is effectively using its working capital to support revenue generation.

Based on the data provided, we can see fluctuations in the working capital turnover ratio. In some periods, like in September 2022, the ratio is notably high at 40.43, indicating a strong efficiency in converting working capital into revenue. However, in other periods, such as March 2021, the ratio is lower at 2.97, suggesting a lower efficiency in utilizing working capital to drive sales.

Given the fluctuations in the working capital turnover ratio, it is important for stakeholders to further investigate the underlying reasons for the changes in efficiency and assess the company's management of working capital in different periods to understand the overall trend and potential areas for improvement.