Choice Hotels International Inc (CHH)

Quick ratio

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cash US$ in thousands 26,754 41,566 511,605 234,779 33,766
Short-term investments US$ in thousands — — — 29,104 —
Receivables US$ in thousands 230,945 273,839 220,111 118,731 141,566
Total current liabilities US$ in thousands 942,690 435,898 570,295 255,847 325,888
Quick ratio 0.27 0.72 1.28 1.50 0.54

December 31, 2023 calculation

Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($26,754K + $—K + $230,945K) ÷ $942,690K
= 0.27

The quick ratio of Choice Hotels International Inc has exhibited fluctuations over the past five years. The quick ratio decreased significantly from 1.50 in 2020 to 0.54 in 2019, indicating a potential liquidity strain in 2019. However, the ratio improved to 1.28 in 2021, suggesting an enhanced ability to meet short-term obligations. The quick ratio further increased to 0.72 in 2022 but decreased notably to 0.27 by the end of 2023, signifying a decline in the company's ability to cover its current liabilities with its most liquid assets. This marked reduction in the quick ratio in 2023 may raise concerns about Choice Hotels' short-term liquidity position and ability to meet its obligations efficiently.