Choice Hotels International Inc (CHH)

Cash ratio

		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
Cash and cash equivalents	US$ in thousands	26,754	36,432	36,167	31,679	41,566	52,541	607,185	527,209	511,605	415,116	307,975	222,961	234,779	191,967	314,139	321,954	33,766	31,569	34,407	31,810
Short-term investments	US$ in thousands	—	-55,081	-44,946	-33,216	—	—	—	—	—	42,961	42,793	—	29,104	26,454	—	—	—	—	—	—
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
Cash ratio		0.03	-0.04	-0.02	-0.00	0.10	0.12	1.04	0.94	0.90	0.78	1.11	0.91	1.03	0.87	1.44	1.26	0.10	0.10	0.11	0.10

December 31, 2023 calculation

Cash ratio = (Cash and cash equivalents + Short-term investments) ÷ Total current liabilities
= ($26,754K + $—K) ÷ $942,690K
= 0.03

The cash ratio of Choice Hotels International Inc has shown fluctuating trends over the past few quarters. A cash ratio below 1 indicates that the company may not have enough liquid assets to cover its current liabilities.

In the latest quarter (Dec 31, 2023), the cash ratio of 0.03 indicates that the company has only 3 cents in cash and cash equivalents for every dollar of current liabilities. This indicates a weak liquidity position.

The significant negative cash ratios in the preceding quarters (Sep 30, 2023, Jun 30, 2023) are concerning, as they suggest the company had negative cash balances relative to its current liabilities during those periods.

The cash ratio improved in earlier quarters such as Jun 30, 2022, and Mar 31, 2022, where the ratio was well above 1, indicating strong liquidity and the ability to cover short-term obligations comfortably with cash on hand.

Overall, it is crucial for Choice Hotels International Inc to closely monitor its cash position and liquidity management to ensure it can meet its short-term financial obligations in a sustainable manner.