Choice Hotels International Inc (CHH)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.73 | 0.71 | 0.99 | 0.37 | 0.31 | 0.84 | 0.86 | 0.92 | 0.80 | 1.08 | 1.69 | 1.40 | 1.34 | 1.20 | 1.92 | 1.83 | 1.69 | 1.65 | 2.40 | 2.08 |
| Quick ratio | 0.09 | 0.12 | 0.33 | 0.05 | 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 |
| Cash ratio | 0.09 | 0.12 | 0.33 | 0.05 | 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 |
Choice Hotels International Inc's current ratio has shown a fluctuating trend over the past few years, varying between 0.31 and 2.40. The current ratio measures the company's ability to cover its short-term obligations with its current assets. Despite some fluctuations, the current ratio generally remained above 1 which indicates that the company has had sufficient current assets to cover its current liabilities.
On the other hand, the quick ratio, which excludes inventory from current assets, shows a more volatile pattern ranging from -0.04 to 1.44. A quick ratio below 1 may indicate potential difficulties in meeting short-term obligations without relying on the sale of inventory.
The cash ratio, which is the most stringent measure of liquidity as it only considers cash and cash equivalents, also fluctuates significantly, having gone below 0 at times. This suggests that the company may have faced challenges in meeting its immediate obligations solely with its available cash reserves.
In conclusion, while the current ratio for Choice Hotels International Inc generally indicates a reasonable level of liquidity, the quick ratio and cash ratio highlight the importance of monitoring the company's ability to meet its short-term obligations without relying on inventory or other current assets.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 0.00 | 14.82 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 18.71 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Choice Hotels International Inc's cash conversion cycle has remained relatively stable throughout the provided periods, typically hovering around 0 days. This indicates that the company efficiently manages its cash flow, operating cycle, and working capital, resulting in a quick turnover of cash.
However, there are a couple of instances where the cash conversion cycle deviates from this trend. On December 31, 2021, the cash conversion cycle increased to 18.71 days, suggesting a temporary delay in converting sales into cash. This could be due to various factors, such as changes in payment terms or slower collections.
Another deviation occurred on December 31, 2023, with a cash conversion cycle of 14.82 days. While this is a significant improvement from the previous period, it still indicates a slight delay in the cash conversion process. Overall, Choice Hotels International Inc should continue to focus on efficiently managing its cash conversion cycle to maximize liquidity and profitability.